The Consumer Financial Protection Bureau (CFPB) released rules today designed to prevent mortgage lenders from making risky, unaffordable loans. These ability-to-repay rules require that lenders document and verify information demonstrating that a borrower can afford a loan and define a class of mortgages, called Qualified Mortgages (QM), that are presumed to comply with the ability-to-repay rules.

Woodstock’s staff and board members gathered together with some of our colleagues last week at a lovely art gallery in Wicker Park to reflect on the work that we've done and look forward to future partnerships. If you couldn't join us, here’s a selection of Woodstock’s greatest hits of 2012.

The overseer of Fannie Mae and Freddie Mac, Ed DeMarco, recently proposed raising fees on mortgage loans made in Illinois and four other states because of their long foreclosure processes. In a disappointing editorial, the Chicago Tribune argued that changing Illinois’ rules that protect homeowners struggling to save their homes would expedite the foreclosure process and encourage a housing recovery. This argument oversimplifies a complex problem and would set back our state’s housing market, not help it.

The Illinois General Assembly passed a bill today that will help local governments clean up abandoned homes and prevent new foreclosures. The bill, sponsored by Sen. Jacqueline Collins (D-16) and John Mulroe (D-10) and Reps. Karen Yarbrough (formerly D-7) and Joseph Lyons (D-19), would generate badly-needed revenue for foreclosure prevention and neighborhood stabilization programs and accelerate the foreclosure process for abandoned homes so they can get into the hands of a responsible party sooner.

Tomorrow and Wednesday, during the remaining days of veto session, the Illinois House and Senate are likely going to vote on SB16 Amendment 8. This legislation will:

An unprecedented alliance of groups from around the country and more than 2,750 people have called on the Office of the Comptroller of the Currency (OCC), the national bank regulator, to assign Wells Fargo a failing grade on its current examination of the bank’s performance in meeting the credit needs of communities. Wells Fargo is the first of the country’s largest banks examined for Community Reinvestment Act (CRA) compliance since the new Comptroller, Thomas J. Curry, was sworn into office in April of this year.

An effort to encourage mortgage lenders to make safe and sustainable loans is under threat by a mortgage industry-backed legislative push.

I had the opportunity to see former FDIC Chair Sheila Bair address the Executives’ Club of Chicago this morning and distribute her new book, Bull By the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself. A pro-regulation Republican, Bair faulted Wall Street for its “short-sighted avarice” and said we need “more long-term thinking” about what is in the public interest. The priority now for Congress, Bair said,  must be implementing the Dodd-Frank Act, “getting the rules done.” Her five recommendations for financial reform include:

We have an opportunity to influence the Community Reinvestment Act (CRA) examination of one of the country’s largest banks: Wells Fargo. Wells’ CRA exam is currently happening, and we urge you to take advantage of the chance to tell its regulator, the Office of the Comptroller of the Currency (OCC), how Wells Fargo is—or isn’t—meeting the needs of your community. We have until November 12 to make our voices heard.

“Mistakes” in loan servicing do more than just bungle paperwork: oftentimes, they have profound and destabilizing effects on the lives of struggling homeowners. Some families are told they are qualified for a permanent loan modification, but wait for months on end without it getting finalized; others are disqualified because the banks make mistakes about their income or other characteristics; still more are denied after months of waiting because of lost paperwork and other mistakes. It’s clear that changes need to be made to loan servicers’ processes for dealing with homeowners facing foreclosure.