Isakson Praises Unanimous Passage of His Amendment to Strengthen Sound Mortgage Lending!

Hey Peachtree City…..as you know I have been pretty vocal in communicating with our elected officials here in Georgia about issues related to fiscal responsibility, financial reform, and housing recovery.  As a result, I have received personal correspondences from our Senators and well as now receiving emails blasts related to their actions and activities related on these same issues. 

Recently, I received an email that contained the latest press release from Senator Johnny Isackson expounding on the Senate’s passage of his amendment to the financial reform bill which was co-sponsored by Senator Mary Landrieu, a Democrat from Louisiana.  Flashback to April 22, 2009, the Senate passed an amendment by Isakson to the senate version of the financial fraud bill to create the Financial Crisis Inquiry Commission.  President Obama signed the Bill into law shortly after on May 29, 2009.  

Just so you know, the Senate passed the Financial Reform Bill legislation on Thursday, May 20, 2010 by a vote of 59 - 39.  Sen. Isakson voted  a resounding NO!  Now, I would also be remiss if I did not state that I am a Realtor and not a politician.  Folks, I’m not taking sides with any elected official or political party on this issue.  This post is simply to give you a factual accounting of the actions of our electorate.  Whatever your opinion is on the actions of each of our elected official is a representation of your beliefs and convictions which can and should be voiced directly to them either or both personally and by the power of your vote. 

I have attached Senator Isacson’s press release for you to review.  By the way he voted NO to the Bill because he felt that it significantly left out the concerns of main street as well as the two major protagonist to the financial crisis saga….Fannie Mae & Freddie Mac. 

What will be the impact of this new fiscal reform legislation?  What impact and implications will it have on you and our economy?  Stay tuned and stay engaged America!  The Financial Crisis Inquiry Commission report is also due out December 15, 2010. 

This doc is suppose to cover what happened as well as present recommendations to prevent another crisis of this proportion from ever happening again.  The Financial Reform Bill is to be reconciled with the House version that passed in December and will more than likely be signed on or by July 4th of this year by Mr. Obama. 

Dear Mr. Saunders:

           As someone who has contacted me in the past about housing issues, I would like to share the following press release with you. 

FOR IMMEDIATE RELEASE
Thursday, May 13, 2010

 Isakson Praises Unanimous Passage of His Amendment to Strengthen Sound Mortgage Lending

WASHINGTON- U.S. Senator Johnny Isakson, R-Ga., today praised the Senate’s unanimous passage of his amendment to the financial reform bill that would require regulators to establish a category of well-underwritten loans and to exempt banks from retaining risk in those loans that regulators determine are safely securitized.

“Risk retention is not the cure-all to good lending. Underwritingis,” said Isakson, who spent more than three decades in the real estate industry. “We’re not going back to making zero down, interest-only, reverse amortization loans anymore. But we are going back to the good old days where there is a down payment, where there’s skin in the game, where there’s an income-to-debt ratio and where the borrower is qualified to borrow the money that they’re borrowing. The only risk retention that will be required is when somebody is making a bad loan, which means people will stop making bad loans.” 

The current bill did not ensure an exemption for mortgages that are safely securitized. Without an explicit exemption for such well-underwritten mortgages, Isakson believes the bill’s one-size-fits-all requirements would have reduced consumer choice, increase the cost of credit and cost our economy jobs. 

His amendment, which he offered with Sen. Mary Landrieu, D-La., would require regulators to establish a category of well-underwritten loans called “Qualified Residential Mortgages” that would be exempt from the risk retention requirements in the bill. To define a “Qualified Residential Mortgage,” regulators would use back-to-basics underwriting and product features proven to reduce consumer defaults, such as requiring documentation of income, setting reasonable payment-to-income ratios and prohibiting the use of features such as negative amortization.

By creating a regulatory “gold standard” for well-underwritten mortgages, Isakson believes the qualified mortgage safe harbor strengthens sound lending behavior within the primary market for qualified mortgages while discouraging excessive risk taking in the non-qualified sector through risk retention.

The amendment was endorsed by the American Bankers Association, Community Mortgage Banking Project, Community Mortgage Lenders of America, Housing Policy Council, Independent Community Bankers of America, Mortgage Bankers Association, Mortgage Insurance Companies of America, National Association of Homebuilders and Real Estate Services Providers Council, Inc. 
 

Sincerely,
Johnny Isakson
United States Senator