Sarbanes to GSEs: Do More to Fight Abuse

Sen. Paul Sarbanes, D-Md., is calling on the housing government-sponsored enterprises "to do more" in the fight against abusive lending practices.The ranking Democrat on the Senate Banking Committee commended Fannie Mae and Freddie Mac at a predatory lending conference for refusing to buy subprime loans with mandatory arbitration clauses and single-premium credit insurance. "The GSEs can continue to work to squeeze down the allowable length and amount of prepayment penalties, as well as reducing the amount of fees that can be financed into a mortgage loan," Sen. Sarbanes said at the Community Law Center conference in Baltimore. The Maryland senator encouraged Fannie and Freddie to move further into the subprime market, and he encouraged the Federal Home Loan Banks to play a more active role in addressing predatory lending. "Let good credit push out the bad," Sen. Sarbanes said.