Political Season

There's bad news and more bad news for mortgage companies in this election year season. First, the bad news. Despite a record high homeownership rate, neither presidential candidate - nor their respective parties - are talking much about housing policy on the campaign trail. Actually, this might good news. Why fix what's not broken?

Then there's the additional bad news to consider. When housing finance is mentioned on the campaign trail this year, it's usually in the context of "predatory lending." The Democratic nominee, John Kerry, pledged to seek a national law protecting consumers from predatory lending practices.

But even this may be good news upon closer inspection.

Rather than attacking the proposal as a smear against lenders or a potentially burdensome new regulation, lending trade groups that represent mortgage bankers and mortgage brokers came out supporting the Kerry position.

That's because a national standard - which would pre-empt a patchwork of state and local laws dealing with predatory lending - is exactly what the mortgage industry has been seeking.

Lenders already have lined up support for this idea from some prominent Republicans, notably Rep. Bob Ney, R-Ohio. The key for lenders is to make sure that any national law pre-empts state and local laws, simplifies the mortgage process and focuses on enforcement of existing laws. At the recent Republican National Convention, mortgage industry executives who spoke with MSN expressed confidence about the prospects for passing a national standard to prevent abusive lending practices, a concept that they support. (The devil, of course, may be in the details. And those details won't emerge until Congress and the administration sit down to work on the legislation.)

As the debate about a national lending standard emerges, mortgage servicers will want to be intimately involved in the debate about what should be in the legislation.

They say there's a silver lining in every cloud, and this year housing industry leaders are hoping to turn a potentially harmful legislative proposal into something that will actually benefit the industry. We hope they succeed.

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