Realtors Call for New Consumer Mortgage Protections

With foreclosure rescue scams and other predatory lending practices on the rise, the National Association of Realtors (NAR) is calling on Congress to enact new protections for consumsers.

The NAR is urging Congress to enact H.R. 1231, the Foreclosure Rescue Fraud Act of 2009, which would create minimum standards for individuals or firms offering their services as foreclosure consultants to distressed homeowners.

In testimony Wednesday before a House Financial Services Subcommittee, NAR representative John Anderson, a Minnesota broker, said that anti-predatory lending reforms are required to restore consumer confidence in the housing industry and avoid another housing crisis in the future.

"Foreclosures lead to families losing their homes and their savings, and can cause entire neighborhoods to lose home value," Anderson said. "A sound and dynamic real estate industry fosters families and communities, and sustains and stimulates the national economy."

The NAR is urging Congress to direct lenders and servicers to be more aggressive in helping distressed homeowners with loan modifications and ensure that foreclosure prevention options are widely advertised. It's also calling for a faster closing process for short sales and mortgage reforms that safeguards consumers and assures access to mortgages at a reasonable cost.

"Historically low mortgage interest rates and a significant tax credit for first-time home buyers have enticed some consumers back into the housing market," said Anderson. "However, we believe that wholesale reform of the mortgage lending sector will give consumers the protections they need and will remove the last impediment to a housing recovery."