Pryce Statement on House Subprime Lending Hearings

April 18, 2007

Pryce Statement on House Subprime Lending Hearings

Washington , DC – Today, Congresswoman Deborah Pryce (R-Columbus) issued the following statement after the House Financial Services Committee’s hearings on possible remedies to the growing rate of mortgage foreclosures:

“There is no larger consumer protection issue facing Ohio,” said Pryce. “ Ohio’s foreclosure rate is now three times the national average, one in six subprime loans is delinquent, and the problem is expected to worsen. While many foreclosures result from serious illnesses and job loss, it obvious that aggressive lending, an increase in the number of exotic and subprime loans, and predatory lenders have created a crisis in Ohio.”

At the hearing, Pryce introduced Doug Garver, Executive Director of the Ohio Housing Finance Agency (OHFA), who testified about OHFA’s Opportunity Loan Refinance Program, which provides 30-year fixed rate mortgages to individuals and families in danger of foreclosure. During the questioning, Mr. Garver reiterated that this is “an urban, suburban and rural problem,” and is not confined to one part of the state.

Pryce agreed, stating, “The growing increase in foreclosures has been tolerated for too long, because of our society’s push to increase homeownership rates, and due to a subconscious belief in the principle of “buyer beware.” But in many recent cases, it has become clear that the buyer cannot beware. When borrowers are stripped of their skills as consumers through misinformation, fraud, and bait and switch tactics, they are left holding a mortgage that they do not understand and have no ability to repay.”

“The cost of foreclosures goes beyond the financial ruin it brings upon the borrower – the practice is now dragging our economy, devastating entire communities, and contributing significantly to the housing slump,” said Pryce. “If the industry is unwilling to police itself, and if many states are incapable of adequately protecting consumers, then Congress must intervene. Homebuyers should be able to easily interact with lenders, assured that their best interests are being protected at the point of sale and in the future.”

Pryce serves as Ranking Member of the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises of the House Financial Services Committee. She has endorsed moving forward with legislation to modernize FHA, increase financial literacy for homebuyers, standardize and simplify industry practices, including regulating mortgage brokers, and aggressively police predatory lenders.

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