April 10, 2002

Fannie Wont Seek Exemption in Georgia

It appears that Fannie Mae will not seek a last-minute exemption from an anti-predatory-lending bill that some Georgia legislators are trying to pass in the final days of the session. The bill is a major initiative of Gov. Roy Barnes. a Democrat, to stop lenders from making high-cost loans toborrowers who cannot afford to repay the loans and to limit prepayment penalties and loan flipping. In an April 4 letter to Gov. Barnes, Fannie Mae asked for an exemption that "will insure that Fannie Mae can continue to advance market-based solutions to the problem of predatory lending, which we believe is the most effective method of addressing this problem." Fannie Mae spokeswoman Janice Daue said the use of the word "exemption" was "inappropriate" and that Fannie Mae has clarified its position in another letter. "We are not asking for an exemption.' Ms. Dane said. Sheadded. however, that Fannie Mae wants to encourage state and local lawmakers to take advantage of Fannie's anti-predatory-lending guidelines, which are binding on lenders who sell loans to Fannie Mae. Community activists such as Bruce Marks, president of Neighborhood Assistance Corp. of America, fear that Fannie Mae's lobbying could scuttle the Georgia bill or creaie a huge loophole. "Fannie Mae is to the mortgage industry what Enron ~sas to the energy industry," Mr. Marks said. "Like Enron. they want to control every aspect of the market from pricing to supply, but they want to avoid scrutiny."

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