Lawmakers Need To Remember Facts

4/30/2007 - Members of Congress, always eager to don the mantle of ‘‘consumer watchdog,’’ are considering possible legislation in regard to so-called subprime lenders. Let’s hope they don’t do anything that could make life more difficult for millions of Americans.The practice of subprime lending involves consumers who, because of bad credit ratings, limited income or other factors, have trouble obtaining mortgage loans to buy homes. Subprime lenders provide mortgages to such folks, often at higher interest rates than what those in more desirable circumstances are charged.But there have been a variety of complaints about some lenders in that business, ranging from exceedingly high interest rates to hidden costs. Some consumers have complained that because they didn’t know what they were getting into with such mortgages, they have lost their homes.Indeed, consumers need some measure of protection. And they may need help understanding how credit and credit history affects their lives and their ability to borrow money.They need to understand, as does Congress, that high-risk borrowers should expect to pay higher rates when they seek mortgages. Too many limits on what they can be charged would have the effect of making it impossible for some people to obtain loans — a fact that lawmakers should remember before they impose new rules.