Tuesday, August 07, 2007

Hillary's Plan to get us out of the Sub Prime Mess

It pretty much boils down to having the government backstop some of the bad loans, add more government oversight of the mortgage market, and also educate the poor-dumb borrowers. I do like her plan to eliminate prepayment penalties though.

-Require mortgage brokers to disclose to borrowers that their compensation rises when borrowers' mortgage rates and mortgage fees are high.

-Work with states to develop strong licensing standards and require federal registration for mortgage brokers.

-Eliminate prepayment penalties on mortgage products.

-Require mortgage lenders to include the cost of taxes and insurance in the underwriting assessment of higher-risk mortgages.

-Establish a $1 billion fund to assist state programs that help at-risk borrowers avoid foreclosure.

-Expand Fannie Mae's and Freddie Mac's foreclosure prevention efforts.

-Establish a $1 billion fund to provide federal support to housing trust funds established by state, county and municipal governments.

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