Released: August 24, 2007

States move to limit subprime lending damage

Source: Clifford Krauss, New York Times (Free Registration)

Gov. Michael F. Easley of North Carolina signed legislation last week that would limit the ability of mortgage brokers to charge customers above-market rates and prepayment penalties and would protect subprime borrowers from highly risky adjustable-rate mortgages. Calling the mortgage meltdown a “wake-up call,” Mr. Easley said, “If Washington isn’t going to act, the states are.”

But amid his call for action was regret that if only officials in his and other states had acted a couple of years sooner, some of the mortgage problems that have roiled the financial markets and hurt homeowners might have been avoided… North Carolina is one of about a dozen states that are beginning to make legislative and regulatory changes to protect people who resort to subprime financing.

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