“We all share the same commitment of developing better protections for consumers against abusive lending and foreclosures and assuring that these borrowers continue to have the financing they need,” said Robbins.  “I urge you to not smash this subtle, intricate and ingenious system of real estate that we have created as we fix problems in the subprime market.”

In his testimony, Robbins pointed out that more than 1 million Americans used a subprime loan to purchase their homes last year.  He reminded the committee that homeownership across the country was near record highs and that subprime loans have played a crucial role in closing the gap between the overall homeownership rate and the minority rate.

Addressing the current troubles in the subprime arena, Robbins cited a confluence on factors including a slowing of home price appreciation and weakening of the job market in some parts of the country.   He reminded the committee that neither was a particularly large problem in New York and thus the state’s overall delinquency (4.82%) and foreclosure (1.11%) rates were below the national average (5.31% and 1.19% respectively). 

Robbins also reminded the members of the committee that 35 percent of New Yorkers own their homes free and clear and only 17 percent of New Yorkers even have a subprime mortgage, and of that 17 percent, 83 percent are paying their subprime mortgages on time.  New York’s subprime foreclosure rate is below the national average.

Robbins pointed out some of the steps the industry is taking to help borrowers who find themselves having trouble paying their loans, including partnering  with NeighborWorks America, a national nonprofit organization to promote their free counseling hotline, 888-995-HOPE, manned by the Homeownership Preservation Foundation. 

Robbins called on legislators to join with the industry and consumer advocates to address the current problems while making sure that subprime loans remain available for those who need them.

“Subprime loans must remain a viable option for lenders to use to increase homeownership,” said Robbins.  “Working together, we can stabilize and preserve the subprime mortgage credit system, provide assistance for homeowners facing foreclosure, and finally, prevent this from ever occurring again.” 

Robbins’ full testimony can be found at www.mortgagebankers.org.

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.