Exact(7)
This may benefit borrowers who are employed in those areas and who have 10 years until retirement.
It also bans "churning," a method of refinancing under which the new loans do not benefit borrowers.
In Washington, some federal lawmakers have proposed requiring brokers and lenders to make suitable loans that benefit borrowers.
Economists refer to these as "transaction costs" that offset the benefit borrowers might get from defaulting on an underwater home loan.
The elimination of paperwork coupled with a proactive approach should benefit borrowers, said Timothy M. Dwyer, the chief executive of Entitle Direct, a direct-to-consumer title insurance company.
It would also bar penalties for prepaying a loan, refinancing that fails to benefit borrowers, the financing of points and fees, excessive balloon payments and lenders' demands for early payment.
Like the House measure, which is sponsored by Representative Barney Frank, Democrat of Massachusetts, Mr. Dodd's bill requires lenders to make only those loans that benefit borrowers and that they can repay.
Similar(1)
So any change that benefits borrowers means an offsetting cut someplace else, perhaps in Pell Grants for the truly needy.
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