Contraman is right but they may do more than just talk, they may throw in a token regulation or two that will only affect a small fraction of the market but give the appearance that consumer protection and forclosure protective measures were enacted. Something that will appease certain interest groups like advocates for the poor. My guess is that they will limit prepayment penalties but put the limit at where 95% of subprime loans are already in compliance. Something where the media will be able to find at least one family to interview that would have been protected. Average joe can watch 60 minutes and see that regulations would have saved the smith family and they will give it a cute name like the “predatory lending act.”
In 1999 or 2000 congress passed a law about PMI protection, I was a victim of a PMI dispute at the time and followed the law while it made it’s was through the process. I had bought a house with 10% down and my lender agreed in writing that as soon as my equity exceeded 20% they would drop the PMI but there was a one year minimum of PMI, since I dropped a deposit and secured the price six months before closing and prices were going up rapidly the price had almost gone up 10% by the time I moved in. I paid an appraiser of their choice at my one year anniversary of the loan who determined I had more than 30% equity, but the lender said that they changed the rule to 2 years minimum regardless of equity (of course after I paid the appraiser). The PMI law was passed but it had a clause that only loans originated after the law was enacted were eligible for the new rule. They don’t pass laws that cost financial institutions money and will allow them to price in the new rules.
My guess is that whatever the market mostly eliminates on it’s own, they will conveniently decide that will be what they make a rule about.
