Senator: Feds' ARM Guidance a 'Positive Sign'

Considering the turmoil in the subprime market, it is a "positive sign" that the federal banking regulators have responded by issuing underwriting guidance on "exploding" adjustable-rate mortgages, according to Sen. Jack Reed, D-R.I."I think [the regulators] are beginning to recognize this is a systemic problem, not just an individual problem," Sen. Reed told reporters after speaking before the America's Community Bankers Washington conference. Sen. Reed told the ACB members that the Senate Banking Committee is working on legislation that increases the availability of housing and foreclosure prevention counseling. The bill would also provide homeowners facing foreclosure with assistance for a few months so they can recover from temporary financial problems. Federal regulators issued proposed guidance on subprime ARMs on March 2 for a 60-day comment period. "I hope everyone in the market will quickly embrace these new guidelines, so we can move forward and work together to address the looming foreclosure problems that may lie ahead," said Senate Banking Committee Chairman Christopher J. Dodd, D-Conn.