When Congress adjourned at the end of 1999, the committee had taken no action. As recently as January when legislators reconvened, Bond s spokesman, Craig Orfield , said he doubted the bill would go anywhere this year. But when the committee met March 21, it decided in favor of the idea. The House was pushing pretty hard for it. One proposal for prepayment penalties put forward by the National Association of Government Guaranteed Lenders had suggested that penalties be phased out after the fifth year rather than the third.
Senators have open minds, and they listened to the arguments.
Among those he cited to whom senators had listened was the Bond Market Association. Kerry, a Massachusetts Democrat, is the committee s ranking minority member. She said the association would show its support by reiterating its position and educating people, if need be, about the need to make such a change. The Bond Market Association initiated a grassroots effort in support of the concept of prepayment penalties after the charges were first proposed a year and a half ago. Meanwhile, many lenders want the penalties to deter borrowers, enabled by a strong economy and wooed by aggressive lenders hoping to win refinancing business, from prepaying loans.