Congressional Briefs: Cummings on Libby, lending

By Robert "Rob" Redding Jr.

Publisher

July 06, 2007, 7:30 p.m. - U.S. Congressman Elijah E. Cummings (D­Maryland), a Member of Joint Economic Committee, this week applauded the Federal Reserve Board and other regulators for issuing guidelines to lenders that will address unfair practices in the sub-prime mortgage industry, which has caused many families to lose their most valuable asset-their home. 

In May, Congressman Cummings sent a letter to Federal Reserve Board Chairman Ben Bernake urging the Fed to require lenders to adopt consumer-friendly lending practices (see attached). 

"Hardworking Americans across the country and in Maryland are being stripped of the cornerstone of the American Dream - their homes - because unscrupulous lenders are engaging in unethical, and sometimes illegal, practices," Congressman Cummings said. 

Story continues below ↓

He continued, "In the current lending environment, borrowers are being qualified based on their ability to pay low, introductory rates. However, when the loan rate balloons after the initial grace or 'teaser' period ends, many homeowners find it impossible to meet the increased payment requirements." 

Another major concern raised by consumers is the overly burdensome prepayment penalty associated with most sub-prime mortgage loans that discourages them from refinancing.   

The guidelines issued by regulators encourage lenders to give customers the opportunity to refinance prior to the expiration of the initial fixed interest rate period without penalty.

Over the past few months, it has become increasingly clear that irresponsible subprime lending practices have contributed to the wave of foreclosures that are hitting homeowners and rattling the housing markets.  According to RealtyTrac, a real estate research firm, foreclosures increased by 42 percent from 2005 to 2006, to 1.2 million.  That translates into one foreclosure for every 92 households.  Furthermore, the Center for Responsible Lending estimates that 1 in 5 sub-prime loans issued in 2005 and 2006 will go into default. 

"While this is a nationwide concern, these predatory lending practices are disproportionately hurting minority borrowers.  Research shows that African American and Hispanic borrowers are 30 percent more likely to be steered into the higher-rate, sub-prime borrowers than non-minorities with the same qualifications," Congressman Cummings said.  "By making this recommendation to lenders, the Federal Reserve is sending a strong message that predatory lending is unacceptable."

In Maryland, the number of foreclosures has been relatively low when compared to national trends; however, the rate is steadily increasing.  According the Mortgage Bankers Association, 5,700 homeowners were in foreclosure and 36,700 were late on their mortgages in the first quarter.  Most startling is the fact that the state ranked 22nd nationally in foreclosures last month, up from 40th in 2006.

"I commend the regulatory agencies for making these recommendations.  These guidelines issued are a tremendous step forward and a victory for consumers," Congressman Cummings said.

Congressman Cummings is also the lead sponsor for House Resolution 526, which supports home ownership and responsible lending.

Cummings hits Bush over Libby

U.S. Congressman Elijah E. Cummings (D­Maryland), a Member of the House Oversight and Government Reform Committee, expressed grave concern this evening about President Bush's decision to commute the prison sentence of I. Lewis "Scooter" Libby, Vice President Dick Cheney's former chief of staff. The commutation releases Libby from a 30-month jail sentence for lying to federal investigators about his role in the White House leak of a CIA officer's identity.

Congressman Cummings released the following statement:

"President Bush's decision to give I. Lewis "Scooter" Libby a 'get out of jail free,' card sends the wrong message on justice.

"It reiterates to my constituents and others across this nation that if you have money and/or friends in high places that you will not be held accountable for your actions.

"Mr. Libby was found guilty by a jury of his peers and sentenced to a term of incarceration that was reasonable. 

"Having to only pay a $250,000 fine when he placed the lives of our intelligence officers in grave danger is merely a slap on the wrist. 

"In a House Oversight and Government Reform Committee hearing earlier this year, we thoroughly examined the case in which the identity of covert CIA agent Valarie Plame was leaked.  The facts presented during our hearing made it clear that Mr. Libby of was guilty of the felonies of which he was accused.

"Our justice system clearly states that if you do the crime, you must do the time.

"However, by allowing Mr. Libby to avoid his sentence, President Bush is sending the nation a statement that an unequal treatment of the law is acceptable."

"In similar cases involving lesser known defendants, the punishments typically are more severe.  Most defendants do not have the option of avoiding jail simply because of their high profile positions.

"Today's action threatens the integrity of our system of justice."

Cummings' press secretary is leaving to start own business  

Devika Koppikar, Press Secretary for Cummings, Friday wrote reporters the following message:

"Hello All,

For the past few years, an e-mail from me meant news from Congressman Cummings.

But this e-mail is a little bit different.

Next Thursday, July 12, 2007, I will be leaving Capitol Hill after serving as a press secretary for almost 6 years. 

I am leaving to start my own consulting in communications and media: K Communications Strategies (KCS).  My company will work with clients on message development, planning media strategies, media training, media connections, publicity management, and speechwriting.  My base will be here in the DC region.

As most of you know, I worked for Congressman Cummings (5 and half years) and Congresswoman Jackson Lee (5 months) during my tenure here.  My time here allowed me to be at the front seat of many historic events:  the 9/11 terrorist attacks, the beginning of the war in Iraq, the 2004 elections, Hurricane Katrina and the 2006 elections, with the change in leadership in the House and Senate.

And, of course, being at the front seat meant interacting with all of you to share the Congressman's views.

My experience here has been unforgettable.  I enjoyed working with all of you, and hope to work with you again soon.

Best wishes to all of you for a bright future. I won't go far - so we will probably be in touch, through my other clients... As for the new press secretary - the office of Congressman Cummings will make announcement on Monday, when this new person is expected to start.  (We plan to have a one week transition period). 

Good bye for now and may you continue to be blessed."

Return to ReddingNewsReview.com
© RCI 2007. All Rights Reserved.