![Risk.net](https://www.risk.net/sites/default/files/styles/print_logo/public/2018-09/print-logo.png?itok=1TpHrpuP)
“Operation Malicious Mortgage” needed to protect Americans
Congressional debate continues on reforms for the US mortgage industry
WASHINGTON, DC – As part of ongoing congressional debates on the US mortgage industry in the wake of the subprime crisis, ranking member Spencer Bachus has commented on the US Department of Justice (DoJ) and the FBI’s investigations into fraud in the US mortgage lending industry.
“For far too long unscrupulous brokers and lenders have thrived because of the lack of adequate oversight and enforcement. The efforts by the DOJ and the FBI through ‘Operation Malicious Mortgage’ are needed to help protect Americans as they navigate the home financing process,” Bachus said.
Bachus introduced the Fair Mortgage Practices Act in July 2007. The legislation’s provisions to create a licensing and registration system for mortgage originators were included in the subprime lending legislation passed by the House of Representatives last November. Senators Dianne Feinstein and Mel Martinez also introduced the SAFE Mortgage Licensing Act, which was also included in the housing legislation currently under Senate consideration.
Bachus also co-wrote a letter to chairman of the Securities and Exchange Commission Christopher Cox in May concerning the conduct of credit rating agency Moody’s after reports it made great errors in rating debt obligations and left the issue unresolved as the subprime crisis deepened.
“The credit rating industry's reputation has suffered – deservedly, many believe – because of its failure to accurately assess mortgage market risk. The credit crisis will continue as long as investors, particularly those seeking to purchase structured products, lack the confidence in the rating agencies' ability to accurately assess credit risk,” said the letter, also signed by House Financial Services Committee chairman Barney Frank and Capital Markets Subcommittee chairman Paul Kanjorski.
For more information on continuing attempts to reform the US subprime mortgage industry and the root causes of the subprime crisis, see feature “The Rotten Core” in July’s edition of OpRisk & Compliance magazine.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Modernising compliance functions with regtech
Regtech addresses the complexities of regulatory requirements, offering innovative tools to modernise compliance functions, streamline processes and enhance efficiency. This article explores its role in compliance and reporting within the banking sector,…
For the Fed discount window, destigmatisation starts at home
US supervisors must change tack to encourage central bank liquidity utilisation
Study finds just 10 banks plan to apply for FRTB models
Research provides extra insight on reasons for decline in internal models
EU banks hedge net interest income to pass new IRRBB test
Would-be outliers look to cut sensitivity of cashflows to rate moves, but at what cost?
Banks cry foul over shock decision from Basel Committee
Asset and liability management professionals question severity of criteria in revised IRRBB tests
Fresh EU push for single securities supervisor to compete with US
But MEP expresses ‘concern’ EU nations will stall revival of capital markets union
Discord deepens over fund-linked trades in FRTB
More banks use punitive approach to capital treatment under new trading book regime, irking regulators
AI, quantum computing and tokenisation set to transform finance – Menon
But significant barriers remain preventing the technologies from unlocking their full potential