The Washington Times
  • Subscribe
  • Times News Services
  • RSS
  • Mobile Headlines
  • e-edition
  • E-MAIL ALERTS
  • REGISTER
  • LOG IN
  • E-MAIL ALERTS
  • WELCOME
  • Your Profile
  • Log Out
  • Front Page Image
  • Classifieds
  • Autos
  • Real Estate
  • Jobs
  • Special Sections
  • Customer Service
  • Home
  • News
  • Opinion
  • Sports
    • NFL
    • NBA/WNBA
    • MLB
    • NHL
    • Tennis
    • Golf
    • Motorsports
    • Soccer
    • NCAA
    • Olympics
    • Outdoors
    • Other
  • Culture
    • Home & Living
    • Family & Kids
    • Fashion
    • Food
    • Travel
    • Health
    • Washington Visitors
    • Books
    • Military History
    • Life
    • Auto
    • TV Listings
    • Movie Listings
    • Death Notices
    • Entertainment
  • Themes
  • Communities
  • Shopping
    • Stores
    • Coupons
    • Daily Double
    • Promotion
    • How It Works
  • Videos
    • Two Guys
    • Birnbaum on Washington
    • Liz Glover
    • Amanda Carpenter
    • Morning Briefing
    • Documentaries
    • Joe Giganti
    • Video Game Minute
  • Podcasts
    • About Headlines
    • Audio and Radio
    • America's Morning News
  • Commentary

    Suicide pact

  • World

    Italian arrests tied to '08 Mumbai attacks

  • Culture

    DESIGN: Exhibits traces decades-old fashion, fabric trends

  • Investigation

    Anglers serve time for black-market rockfish trade

  • World

    Islamic center in Maryland keeps ties to Iran

  • Politics

    ANALYSIS: Obama takes a bow, but applause is weak

  • Politics

    Republican governors: 'Opt out' unworkable

Thursday, February 9, 2006

Federal directive targets risky mortgage practices

Rate this story

Average 0.00
after 0 votes
Login or register to rate this story

  • Font Size -+
  • Print
  • Email
  • Comment
  • Tweet this!
  • Share
  • Article
  • Comments ()
  • Click-2-Listen
  • Videos

More Stories

  • Iran: Missiles ready for Israel, U.S. bases if attacked
  • Massive bill steals show in health care debate
  • Coal mine blast kills 42 in China; 66 trapped
  • Obama: Asia trip a boost to U.S. economy

By

Third of three parts

Federal banking agencies, concerned about the potential for abuses in mortgage lending, are going after the worst practices in the industry.

A directive last month from the Federal Reserve and four other federal agencies targets the proliferation of loans offering interest-only payments for extended periods and adjustable-rate mortgages that offer the option of paying interest only, making a minimum payment each month or adding in principal. That includes about half of all mortgages made last year.

Regulators say they are particularly concerned that some loans not only do not pay down principal, like a traditional mortgage, but they also increase the amount of principal that a consumer must pay by as much as 100 percent through "negative amortization."

The regulators also expressed concern about the growing practice of "layering" risky mortgages on top of already dicey lending practices, such as requiring no down payment or proof of income from borrowers.

The regulators said banks that offer such loans will be held accountable for making full disclosure of the risks to consumers.

But many inside and outside the mortgage industry question how much impact the banking directive will have, because so many mortgage brokers operate outside the banking system. Only those that are subsidiaries of banks would seem to be affected.

"Banking regulators actually have fairly minimal control or even influence over a huge portion of our economy," said Christopher Cruise, a Washington mortgage broker and trainer for the Mortgage Training Institute.

"I'm not saying we're thumbing our nose at the regulators," he said. But "if I'm a street-level originator licensed by the state of Maryland generating 20,000 loans in a year, and I find rich investors to buy them, nothing the [Office of the Comptroller of the Currency] says has any impact on me."

Mortgage companies such as Countrywide, the biggest nonbank lender in the country, appear to be unaffected, he said.

12345Next »

Post a comment

There are comments on this article, submit your opinion!

Commenting is disabled for this entry.
If you feel there is still something worth mentioning about this entry please contact the author or the site admin.

Ask a Question

You Report

Do you have another point of view, photos, audio, video or more information about a story?

Top Stories

Most Read

  1. Health bill could get 34-hour reading in Senate
  2. Work site arrests of illegals fall dramatically
  3. Senate health care bill creates new marriage penalty
  4. Massive bill steals show in health care debate
  5. KELLNER: New Apple mouse really is 'Magic'
More Top Stories »
  1. Report: D.C. schools chief Rhee mishandled sexual misconduct scandal
  2. 19 gang members face racketeering charges
  3. EXCLUSIVE: Taliban chief hides in Pakistan
  4. EXCLUSIVE: Hoffman considering recount claim
  5. PRUDEN: Obama bows, the nation cringes

Most Shared

  1. Religious leaders vow civil disobedience on anti-life issues
  2. Report: D.C. schools chief Rhee mishandled sexual misconduct scandal
  3. PRUDEN: Obama bows, the nation cringes
  4. Faint Shroud of Turin text proves artifact real, book says
  5. Massive bill steals show in health care debate
More Top Stories »
  1. EDITORIAL EXCLUSIVE: On terrorists, Justice recused
  2. Socialist or vast expansion?
  3. PRUDEN: The Third World and Obama
  4. EDITORIAL: Gunning for Sarah Palin
  5. Senate health care bill creates new marriage penalty

Most Commented

  1. Religious leaders vow civil disobedience on anti-life issues
  2. Work site arrests of illegals fall dramatically
  3. Army lacks guidelines to deal with jihadists in ranks
  4. PRUDEN: The Third World and Obama
  5. EDITORIAL: Get ready to bomb Iran
More Top Stories »
  1. Senate health care bill creates new marriage penalty
  2. Obama's approval rating falls below 50%
  3. Massive bill steals show in health care debate
  4. EXCLUSIVE: Taliban chief hides in Pakistan
  5. Unforeseen climate 'crisis'

Listen to Washington Times Radio

  • America's Morning News

    with John McCaslin and Melanie Morgan

Blogs & Columns

  • Hot Button Blog

    RNC: Breast cancer recommendations may lead to 'rationing'

  • Belief Blog

    Evangelicals OK civil disobedience

  • Out of Context

    Foods that might kill libido

  • On the Fly

    United lifts some 'award' blocking

  • Technology

    Facebook wins round against phishing spammer

  • Redskins 360

    Rookie Williams hurts ankle

  • SNOBlog

    Beyond 'Woody'

Videos

Advertising Links
TWT Store
  • e-edition
  • Print Edition
  • Weekly Washington Times
TWT Affiliates
  • Middle East Times
  • Golf
  • UPI
  • Arbor Ballroom
  • Washington Times Global
  • About TWT
  • Press Room
  • F.A.Q.
  • Work for TWT
  • Advertise
  • Sponsors
  • Contact Us
  • Privacy Policy
  • Site Map

All site contents © Copyright 2009 The Washington Times, LLC.