Sen. Jeff Merkley, D-Ore., on Friday applauded the Consumer Financial Protection Bureau's sweeping new rules to reform the nation's mortgage market and protect Americans from predatory home loan practices.
Merkley cheered the agency for putting an end to interest-only loans, “no doc” loans, and loans based on an initial “teaser” interest rate.
Merkley has been a leading voice in Congress for stronger consumer protections in the mortgage marketplace and wrote key provisions in the Dodd-Frank Wall Street Reform Act that these new rules are based on.
"Too many homeowners were steered into predatory home loans by brokers who got kickbacks for selling sub-prime loans,” Merkley said.
“Homeownership should be an engine of opportunity and economic growth. These new rules are a major step towards ensuring that scams and recklessness in housing markets don’t threaten families and our economy again in the future.”
Merkley also urged a specific path forward on how the "yield spread premiums," also known as steering payments, should be calculated in the new rules. Merkley wrote Dodd-Frank’s ban on these payments from lenders to mortgage originators based on the terms of the loans.
“The steering payments rules were not finalized today,” Merkley said, “and I urge the CFPB to move forward with strong rules that will protect homeowners from onerous fees and end the incentive to steer new homeowners into predatory loans."