Isakson speaks out on mortgage
U.S. Senator says banking industry should reform
ALPHARETTA, Ga. — U.S. Sen. Johnny Isakson warned business leaders on Thursday that unless the mortgage and banking industry tightens lending practices Congress is likely to do it for them.
The Georgia Republican told the North Fulton Chamber of Commerce that he believes “a few bad actors” are to blame for the nation’s subprime mortgage woes, but that the Democratic-led Congress is poised to step in unless the industry volunteers more transparency.
“ Government’s responsibility is to regulate when an industry fails to regulate itself,” Isakson, of Marietta, said.
“It would be a shame because of a few bad actors to overregulate an entire industry that is otherwise doing well.”
Isakson said that already a pair of Democratic presidential contenders — Sens. Hillary Rodham Clinton of New York and Christopher Dodd of Connecticut — have floated proposals aimed at reining in the industry.
He called Clinton’s plan to provide a pool of funds to help at-risk homeowners dodge foreclosures “the worst thing you could do.”
The only way for the industry to avoid government meddling is to be proactive, Isakson said.
“They have to say ‘we need transparency, here are the standards we are going to impose,’” said Isakson, who made his fortune in a family-owned real estate business.
The U.S. economy has been reeling from subprime mortgages, loans given to people with imperfect credit or low incomes. Weak home prices and rising interest rates have made it increasingly difficult for borrowers to keep up with their payments; delinquencies and foreclosures are sharply rising.
Isakson declined to comment Thursday on the men’s room sex scandal that has engulfed fellow Senate Republican Larry Craig, of Idaho. Isakson is one of the six U.S. senators on the Select Committee on Ethics that will hear a complaint filed against Craig.
As a good jurist, I have to hear all the facts and it would be inappropriate for me to make a comment without hearing all the facts,” Isakson said.