Robbins: Consumer Groups Hyping Foreclosures

Mortgage Bankers Association chairman John Robbins has told an industry conference that predatory lending is the biggest and most challenging issue he has faced, but he also accused certain consumer groups of hyping potential foreclosure numbers.At the Regional Conference of Mortgage Bankers Associations in Atlantic City, N.J., Mr. Robbins specifically addressed the Center for Responsible Lending's claim of 2 million foreclosures from subprime loans. He said the largest loss in the modern history of foreclosures was in 2000, but that current foreclosures are less than half that number. Furthermore, 50% of loans using loss mitigation techniques do not enter the foreclosure process. Approximately 86% of subprime borrowers are current on their mortgages, he said. Mr. Robbins also attacked Freddie Mac's plan to require 2/28 and 3/27 loans that it purchases to be underwritten to the fully indexed rate. He said this would create a disparity in the marketplace, and would hit those who need credit the most, especially the borrowers of $1.1 trillion in adjustable-rate mortgages that are set to reset this year. Some of these borrowers will not be able to get out of the products, he said.