Ney-Kanjorski Passage Seen as Uncertain

If enough people in the mortgage industry don't get behind the Ney-Kanjorski bill, it is unlikely to pass Congress this year despite its many positive aspects, according to Bob McKew, senior vice president and general counsel of the American Financial Services Association.Mortgage brokers, the secondary market, and the bond market and securities associations need to back the bill, which would establish national lending standards, Mr. McKew said at the Subprime Lending Symposium in Las Vegas. "I don't see the momentum that is needed by all sectors for it to push through," Mr. McKew said. "There is a long road to go before federal pre-emption happens in this area." Loretta Salzano, a partner with Franzen & Salzano PC, said her clients, many of which are national lenders, make sure to comply with different state predatory lending laws, even though they are pre-empted by the Office of the Comptroller of the Currency. "Wholesale lenders, brokers -- they follow these laws, too," she said. "Very few engage in high-cost lending. There is a stigma attached with that, and lenders understand the reputation risk associated with it." The bottom line, said Bill Smith, general counsel of Option One Mortgage Corp., a subprime lender, is that dealing with the patchwork of predatory lending laws in different states is costly and burdensome for lenders. "I'm going to say the Ney-Kanjorski bill will pass," he declared.