The letter sent to Chairman Bernanke emphasizes the importance of strengthening federal regulations in order to increase consumer protections and enhance market stability.
By encouraging the Federal Reserve to prohibit prepayment penalties for subprime loans, require realistic underwriting standards, eliminate predatory lending practices, and improve disclosures on loans, we are asking Chairman Bernanke to make the necessary steps to hopefully prevent such mortgage problems from occurring at such a large scale throughout the country again.
I am especially hopeful that when the Federal Reserve releases its regulatory proposal that it will put in place a national standard requiring escrow accounts — for paying taxes, insurance, and other fees — for borrowers who are likely to have problems budgeting for these predictable homeownership costs. I have widely advocated for this reform, and I worked to make sure that the recently passed House subprime lending reform bill addressed this issue.