White House Offers Plan to Ward Off Credit Crisis

New York Times (03/14/08) P. A1; Labaton, Stephen
The Bush administration wants states to issue licensing standards for mortgage brokers, lenders to provide more information on payment terms to home buyers and companies to limit conflicts of interest in assigning levels of risk to mortgage securities sold to investors. The White House sees the proposal, which was welcomed by industry representatives, as having the potential to prevent future problems in the credit markets. Federal banking and securities regulators and new committees run by industry executives will issue regulations in the next few months to execute the plan, while federal legislation might be crafted to tighten rules for mortgage brokers. Democratic lawmakers said the proposal is too late and does not go far enough; they said that they plan to assist states in purchasing homes in foreclosure and press mortgage lenders on writing down the value of mortgages in distressed communities.