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Wednesday, May 09, 2007

Ind. Law - More on: Fighting foreclosures and mortgage fraud

Rep. Michael Murphy of Indianapolis has a featured letter to the editor today in the Indianapolis Star, headed "Mortgage lenders can't hide much longer." He discusses the failure of HB 1525, a bill which would "required builders to disclose estimated property taxes for a new home’s full value." His letter concludes:

HB 1525 passed the Indiana House, 96-2. Then the lobbyists for the mortgage lenders went to work. They had a long list of objections to providing basic information to their customers. Chief among them were cost and liability. We answered their concerns, to no avail.

The legislation was amended to protect lenders from being sued in case of inaccurate property tax estimates. The Indiana Housing and Community Development Authority and the Department of Local Government Finance were willing to provide online consumer information and a calculator for estimating property taxes, at no cost to the lenders. Each time an issue was mitigated with the help of the Daniels administration and legislative leaders such as Reps. Jeb Bardon and Vanessa Summers, new obstructions were created. Finally, the lenders claimed "federal pre-emption," a catch-all term that allows them to hide behind federal regulators. In the end, the bill died, 49-48.

The mortgage lenders and their lobbyists were able to parse their way around their moral obligation this year. They will not escape accountability indefinitely. The U.S. Justice Department and the FBI are investigating a builder/lender active in the Indianapolis area for foreclosure rates of 13 percent. I will continue to work with men and women of good will to ensure potential homebuyers enter a deal with their eyes wide open.

Meanwhile, young homeowners continue to struggle. They do not have lobbyists. All they have is a dream. And those dreams are being broken by the thousands as mortgage lenders continue to put profit before principle.

For background, see this March 7, 2007 ILB entry.

Posted by Marcia Oddi on May 9, 2007 04:10 PM
Posted to Indiana Law