FOR IMMEDIATE RELEASE                                                          Contact: Gretchen M. Wintermantel
Wednesday, Sept. 23, 2004                                                202.225.6511

Statement by Congressman Kanjorski on reforms of subprime lending practices:

"Predatory lending is a complex problem that requires a comprehensive legislative solution," said Congressman Paul E. Kanjorski, who currently serves as the second most senior Democrat on the House Financial Services Committee.  Congressman Kanjorski has been working during the current Congress on developing legislation to address the issue and create uniform national standards to protect consumers from predatory lending.  He hopes to circulate a proposal in the coming months, and many in Washington have expressed an interest in considering such legislation during the 109^th Congress, which begins in January 2005.

"In my ongoing and extensive examinations, I have concluded that it is just as bad to place families in overvalued homes as it is to finance their homes either with excessive interest rates, points, fees, and charges or without considering their ability to make timely payments.  All have the effect of potentially setting up a homeowner to fail," observed Congressman Kanjorski.  "We therefore need to work in Washington to address appraisal matters, among other things, in any legislation to combat predatory lending that we consider next year."

"At a recent congressional hearing in Pennsylvania's Monroe County, we learned more about some homeowners relying upon inflated appraisals that established unjustifiable and unrealistically high real estate values at the time they purchased their homes," added Congressman Kanjorski.  "As just one of many examples, one family purchased a home in the Poconos for slightly more than $150,000.  Fourteen months later when the family decided to sell the house, the same property was then appraised at just $77,000.  We need to ensure that other families do not experience a similar shock in the future."

Congressman Kanjorski concluded, "Appraisers serve an important role in our real estate system.  When done correctly, appraisals provide an independent, third-party verification of a property's true value for the lender, the borrower, and the seller.  We need to ensure that the appraisal process continues to work as intended."

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