"We'd like to see strong rules passed to avoid a repeat of this," said Fuget, "because this seems like a new wave of problems that arose after the passage of HOEPA (the Home Ownership Equity Act). Congress passed HOEPA in 1994 to respond to the last wave of equity stripping, but "the marketplace morphed after HOEPA, finding a new opportunity" to make money in subprime loans, said Fuget.

"One way to deal with the problem is to go back to responsible underwriting," he said. And now, everyone seems to agree (again). The joint statement supports efforts by federal banking regulatory agencies to strengthen those underwriting standards to protect borrowers against unfair and deceptive mortgage lending practices.

"It's a good start," said Eva Weber, analyst with the Aite Group in Boston, a financial services industry-consulting group in Boston (www.aitegroup.com). "These groups are trying to self-police the industry before legislators weigh in," she said. And those groups and others, including Federal Reserve Chairman Ben Bernanke is concerned that legislators will over-react in regulating the process and thus, restrict homeownership.

The Fed has scheduled a hearing on June 14 on the matter, and Fuguet said he's hopeful that the Fed will use its authority under HOEPA well. "Chairman Bernanke is concerned about a spillover effect, but I believe that is already happening."

"The point is to make the consumers' interest come first," said Weber. "They must tighten practices and strengthen disclosures and make certain that the ability to repay is there." That also happens to be in the best interests of lenders, as no one makes money off lost payments. "Those groups that have responded have made a good first start, I think," Weber said. "But some big problems have come from groups that are state regulated–the mortgage brokers are regulated by the states, so something needs to be done with these brokers who are not covered by any Federal regulator. That's why the Federal regulator won't drop this as an issue."

The joint statement stressed that "fear of over-reaction" in saying, "We urge the federal regulators to ensure that the proposed statement on subprime mortgage lending strikes a careful balance that provides enhanced consumer protections without unintentionally limiting the availability of home ownership to credit worthy borrowers. We also urge state regulators to apply the same standards to mortgage lenders under their jurisdiction. Consistent regulation and uniform standards for all originators is essential to safe underwriting and protection for consumers."

What the groups want is a single uniform national standard that will provide consistent protections to consumers in all 50 states and U.S. territories. They feel that such a national uniform standard should provide "fair and consistent application to both bank and non-bank mortgage lenders."

Existing regulatory and enforcement authority of federal banking regulators over federally chartered institutions and their affiliates would be preserved in that scenario. They agree also on assuring the ability to repay and making full and complete disclosures, including estimates of future payment increases.