Schumer Weighs in on Subprime Debate

New York, NY —

Senator Chuck Schumer warns that more federal oversight is needed in the sub-prime lending mortgage market. Schumer called the sub-prime market “the wild west of mortgage loans.” And he said it's time to bring a sheriff into town.

Sub-prime lenders peddle mortgages that often require no money down and are made at ``teaser'' interest rates that soon rise. They target marginal borrowers with weak credit or questionable incomes who previously might not have gotten a loan at all. Schumer said an analysis by his office found that an estimated 1.8 million American families, including 91,000 in New York, are at risk of foreclosure when the rates are reset within 2 years.

He said more federal regulation is needed to protect home buyers from unscrupulous lending practices. His plan would create a national regulatory system for mortgage brokers and loan officers, including those at non-bank companies.