Personal Finance News

Posted On: 2006-01-03
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Hey everybody, welcome back to your Debt Podcast. Today is Tuesday, January 3, 2006. My name is Jay Fleischman, and thanks for staying subscribed. On today's show we've got some news and information from the trenches of personal finance, and our daily resolution helper.

And now, the latest headlines from the world of personal finance.

The Los Angeles Times reports that the sub-prime lending industry is on the warpath to get Congress to roll back consumer protection statutes. More than two dozen states have laws targeting abusive practices, one of the industry's biggest players, Ameriquest Mortgage Company is nearing a $325 million settlement with 33 states over alleged bait and switch tactics, inflated appraisals and other issues. Amid scrutiny of their operation, lenders have rallied behind a bill sponsored by representative Bob Nye, a republican of Ohio, and Paul Kanjorski, a democrat of Pennsylvania, that would impose uniform national rules on the industry that last year issued $530 billion in higher costs mortgages. Supporters say that the measure is needed to replace a hodge-podge of state and local lending laws. Lenders claim that the state and local protection make it costlier to extend credit to higher risk borrowers. Consumer advocates state that the new bill is a thinly veiled attempt to undo those state regulations, where they exist, and prevent new laws from being adopted. The proposed federal regulation would, among other things, be more permissive than several state measure when it comes to lending practices known as flipping, which differs from the common practice of buying and selling quickly in order to turn a fast profit. In lending terms, flipping refers to loan agents persuading borrowers to refinance after only a short period of time. The flipping generates new fees and commissions and home agents and can put cash into the hands of borrowers, however, it also chips away at homeowner's equity and may saddle borrowers with costlier terms than they had originally...