Bill targets mortgage practices

January 16, 2008
A panel of state lawmakers Tuesday quickly approved a bill aimed at curbing home foreclosures by cracking down on predatory mortgage lenders.
     The bill would ramp up regulation of mortgage-only offices that currently operate with little regulation. It would require stringent national background checks on all appraisers and mortgage brokers. It would require lenders to provide borrowers a summary of how their adjustable-rate mortgages will "reset" to higher interest rates — and higher payments — in a few years. And it would require all lenders to protect borrowers' personal information and would increase the criminal and civil penalties for mortgage fraud.
     The proposal, Senate Bill 89, now moves to the full state Senate for consideration.
     Indiana was recently ranked ninth in the nation for the number of home foreclosures in November, according to RealtyTrac. Experts have attributed the nation's home-foreclosure and subprime-lending crisis in part to unethical lending practices by some brokers, who made mortgage loans to high-risk borrowers who could not pay when the loans reset to higher rates.