Bankers who gathered in Las Vegas to hear Melvin L. Watt reveal mortgage rule changes said they won’t do enough to expand credit to many Americans shut out of housing. Lenders demand relief from government lawsuits too.
“The future of housing in America is on the line,” Bill Cosgrove, chief executive officer of Strongsville, Ohio-based Union Home Mortgage Corp., yesterday told thousands of attendees of the Mortgage Bankers Association annual conference. “It’s consumers that ultimately pay the price” of the legal action.
Watt, 69, the director of the Federal Housing Finance Agency, outlined the flaws that will require lenders to repurchase bad loans from Fannie Mae and Freddie Mac. Lenders big and small have imposed credit standards above those required by the two government-controlled companies to reduce buybacks. Bankers at the conference said government lawsuits over loans with errors, which have cost lenders tens of billions of dollars, remain the biggest obstacle to expanding credit.