By Iris Richmond. To fight fraud and promote consumer protection, the Mortgage Banker's Association of America (MBAA) wants to make the finance process more understandable for home buyers. Because many of the problems associated with predatory lending arise from complexities and ambiguities in the current system, the MBAA's aim is clarity.

"Reform simplifies the process. Anything that can make the process easier for the consumer makes the sale easier for the home builder," says John Courson, vice president of the Washington-based association.

To confound scoundrels who perpetrate mortgage fraud, says Courson, the association developed a seven-point plan for comprehensive reform and offers a variety of publications including Stop Mortgage Fraud, a book published in March describing 12 warning signs alerting consumers to fraud in a mortgage transaction. (See

The MBAA is urging the Federal Reserve Board and HUD to issue detailed, prospective guidance on their interpretation of the Equal Credit Opportunity Act.

"If HUD climbs on board with the ruling it should issue in the next 90 days, reform could be 12 to 24 months away," says Courson.

Seven Steps for Clarity

  • Fully enforce consumer laws.
  • Offer a loan closing cost guarantee.
  • Improve disclosure for consumers.
  • Enhance enforcement tools.
  • Increase availability and quality of loan counseling.
  • Increase consumer education.
  • Maintain industry commitment to fair lending practices.

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