Under a new proposal from the Federal Reserve Board, which would amend the consumer protection laws passed over the summer, consumers would have to pay off a home loan even after they received bad information, before it could be terminated, according to a report from Dow Jones Newswires. Currently, Americans have three years to argue that lenders broke consumer protection laws, and perhaps force lenders to refinance or modify the loan.
“In this time of record foreclosures and reports of systemic problems with the operations of the largest mortgage servicers, the proposed revisions are unfortunate and unnecessary,” a group of Democratic U.S. Senators wrote to the Fed, according to the report. “The mortgage market needs greater oversight and accountability to restore borrower confidence lost in the mortgage crisis. The proposed rules would undermine this goal.”
The letter was signed by Senators Sherrod Brown of Ohio, Tim Johnson of South Dakota, and former Senator Chris Dodd, who used to head the Senate Banking Committee, the report said. A Fed spokeswoman told the news organization that the lawmakers’ suggestion will be taken under advisement.
Many consumers have been victimized by improperly handled mortgages over the last few years, and many have faced foreclosure as a result.