WASHINGTON (Reuters) - A senior senator said on Wednesday that Congress will pass legislation this year to regulate mortgage brokers, a segment of the housing finance industry under intense scrutiny over the subprime crisis.
"We will get that passed this year. There will be regulation of mortgage brokers, as there should be, at the federal level," said Sen. Charles Schumer, a New York Democrat and chairman of Congress' Joint Economic Committee.
He also called for reform of credit rating agencies. "I am seriously looking at, and our committee is going to hold hearings, on the credit rating agencies ...
"Maybe the structure should change. There's a built-in conflict of interest," Schumer said in remarks at the Reuters Regulation Summit in Washington.
In addition, he said, originators of home loans should have some legal liability for their actions. But he said he would not support extending that liability up the chain of transactions in the mortgage-backed securities market.
"To go all the way up the chain and tell somebody who has one-thirtieth of this mortgage and one-fortieth of this mortgage ... that you have to look at each mortgage, no. That's the job of the credit rating agencies," he said.
Leading rating agencies include Standard & Poor's, a unit of McGraw Hill Cos. Inc (MHP.N: Quote, Profile, Research, Stock Buzz), Moody's (MCO.N: Quote, Profile, Research, Stock Buzz) and Fitch, part of Fimalac (LBCP.PA: Quote, Profile, Research, Stock Buzz).
Congress and the Bush administration are weighing a range of emergency actions and long-term reforms amid a global credit crunch triggered by trouble in the U.S. housing market.
During the recent home price bubble, banks and other lenders loosened standards for mortgage loans and extended real estate credit to many previously ineligible borrowers. Some loans were a poor fit and some were deceptive. Continued...
© Thomson Reuters 2008. All rights reserved.
| Paper | Aug 20 - 21, 2008 | Manufacturing |
| Japan Investment | Jul 01 - 2, 2008 | Country Summits |
| Global Real Estate | Jun 23 - 25, 2008 | Real Estate |
| Consumer and Retail | Jun 16 - 18, 2008 | Consumer Retail |
| Investment Outlook | Jun 09 - 12, 2008 | Financial Services / Exchanges |
