Scoring the Lenders: A Risky Affair

Roll Call (04/28/08); Ackley, Kate
Becky Walzak, owner of Boca Raton, Fla.-based Walzak Risk Analysis, is fighting to have an amendment included in the mortgage rescue bill up for consideration by the House Financial Services Committee that would institute a scoring system for banks and lenders to hold them accountable for the loans they underwrite. While the amendment has not yet been included, Walzak insists she has supporters in both the House and Senate. Regarding her scoring model, she states, "I have really been focusing on the underlying way that we create loans, and understanding that there is a relationship between the mistakes you make when you're creating the loans and how those loans perform. However, the lending industry opposes the amendment. According to Mortgage Bankers Association Senior Vice President for Legislative and Political Affairs Erick Gustafson, "We're hesitant to see anything adopted by the committee that would make the program less useful for lenders to help borrowers stay in their homes."