The chairman of a House Banking subcommittee blasted a proposal Wednesday by two government agencies to rewrite the mortgage disclosure law.
Speaking at a hearing on the reform plan, Rep. Rick Lazio, chairman of the housing and community development subcommittee, said the Federal Reserve Board and the Department of Housing and Urban Development had failed to address whether mortgage broker referral fees are legal. Lawsuits challenging the propriety of this common industry practice are pending around the country.
Rep. Marge Roukema, chairwoman of the financial institutions subcommittee, told the agencies that their reform plan is unlikely to reduce the paperwork consumers face.
The New Jersey Republican said the two subcommittees will hold more joint hearings in September on the reform proposal, which would expand the annual percentage rate to include more fees and require the industry to disclose closing costs earlier in the application process.