Leadership from a Candidate

Chris Dodd:

The chairman of the U.S. Senate Banking Committee unveiled legislation on Wednesday that would prohibit mortgage brokers and lenders from steering borrowers to high-cost loans.

The reform measure is meant to curb some of the excesses of the recent housing boom that has soured into a spike of loan delinquencies and foreclosures, according to Sen. Christopher Dodd, a Connecticut Democrat.

The legislation "will put an end to the practices that have forced thousands of Americans into foreclosure and put thousands more in danger of losing their homes," Dodd, a contender for the Democratic nomination for the presidential election in November 2008, said in a statement.

Dodd said subprime borrowers who won a loan despite their damaged credit have been among the most hard-hit by recent market turmoil. His legislation would require subprime mortgage lenders to hold annual costs like taxes and insurance in escrow and have proof that the borrower has the ability to make payments.

This certainly isn't an end-all-be-all to fix the subprime problem, but it addresses many of the issues and dubious practices surrounding the industry. Lenders shouldn't lend to people who can't pay back those loans for the lenders' short-term gain in posting higher revenues.

It's refreshing to see a candidate - especially one who has the power to - introduce real legislation aimed at fixing a problem, as opposed to only talking about their plan or what they'd do if they were President.

On a meta note, I'm giving up. Enough with trying to blog in serious, academic prose. Contractions it is! ... or maybe that should be "contractions it's!"