Snowe Seeks to Help 'Self Employed' Home Loan Market

Senate leaders late Tuesday cleared the way for Sen. Olympia Snowe, R-Maine, to offer an amendment allowing mortgage bankers to originate residential loans to small business owners with flexible payment schedules that reflect seasonal changes in cash flows. The Snowe language would amend the Consumer Financial Protection Agency section of the financial services regulatory reform bill, putting such mortgages in a category where they will not be considered abusive by the new agency. "The bill does not take into account that many entrepreneurs use home mortgage loans with customized payment terms," Sen. Snowe said. (Until the credit crisis, some self employed workers used payment option ARMs, or "NINA" loans to obtain housing credit but those loans have since fallen out of favor and are now viewed warily by consumer groups and many elected officials as well as regulators.) Once Senate leaders reach an agreement to start the voting process, the Snowe amendment is expected to be adopted. Meanwhile, Senate Banking Committee chairman Christopher Dodd, D-Conn., reached an agreement with Sen. Richard Shelby, R- Ala., on the issue of bailing out large financial firms. "I'm satisfied we have reached an agreement on 'too big to fail,'" said Sen. Dodd, but noted that other senators want to see the final language before signing off on it. Dodd believes the agreement on the TBTF amendment will result in the voting process moving forward.