Lenders propose their own subprime fix
A "For Sale" sign hangs in front of a home in Naples, Fla., a city that a March 2006 survey declared the most overvalued housing market in the US.
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SCOTT JAGOW: Everybody wants to fix the subprime mortgage market. The lending industry is saying: Hang on — let us handle this. Five big trade groups are offering a solution, so Congress won't have to. Jeremy Hobson reports.
JEREMY HOBSON: Congress is anxious to solve the problems with the subprime market. Lawmakers have got some ideas of their own -- ideas like a federal bailout and tougher restrictions on lending to borrowers with iffy credit. But many in the industry want to beat them to the punch.
FRITZ ELMENDORF: Sometimes Congress overreacts.
Fritz Elmendorf is with the Consumer Bankers Association. That's one of the groups offering up today's proposal, because he says a one-size-fits-all approach would be the wrong choice.
FRITZ ELMENDORF:We could have an unintended consequence, where mortgage credit would actually become less available at a time when that could make some problems or some matters worse.
The industry is proposing better warnings on the risks of subprime loans, and counseling for homeowners facing foreclosure. But growing impatience from Congress is likely to make it a tough sell. Senate Banking Committee Chairman Chris Dodd says it's past time for action.
In Washington, I'm Jeremy Hobson for Marketplace.