The new financial reform bill contains provisions that may drive up costs and reduce choice for consumers in the mortgage industry, The Wall Street Journal reports.
Provisions in the bill reduce originators' ability to offer riskier mortgages, such as those for which borrowing costs are initially low but then rise sharply, The Wall Street Journal reported. The bill also gives consumers greater scope to seek damages if they are given a loan they can't afford. The industry says this increased legal liability may lead to more expensive mortgages.
"There's not going to be any room for experimentation or trotting out loans that have new features," Glen Corso, managing director of the Community Mortgage Banking Project, which represents small, independent mortgage lenders, told The Wall Street Journal.
Financial Reform Bill May Reduce Choice in Mortgage Industry