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Although they do not come together on issues often, consumer advocates and mortgage lenders are calling for the Obama administration to cut back on the lawsuits that are making it harder for potential homeowners to qualify for loans. The lawsuits, hitting the banking industry hard, are allegedly behind more bank denials for home loans based on past credit problems.

In total, three proposals have been presented to the administration. They are nearly identical but they are presented separately by liberal-leaning advocacy groups, the Urban Institute, and the Mortgage Bankers Association. These proposals all request that the current administration scale back on the tool used by the government to admonish banks accused of mortgage mistakes.

According to lenders, fear of being hit with one of these lawsuits is a primary reason why they have had to adopt and apply stricter rules for mortgage qualification. This means that borrowers “on the line” who might have qualified without bank fear of legal action lose out on the potential for getting a loan. Those banks who have been pursued with legal action face financial penalties.

Research from the Urban Institute, one of the groups who has submitted a proposal, says that more than one million mortgage loans are being kept out of the hands of consumers as a direct result of these lawsuits. Tight credit restrictions were put in place by many banks in the aftermath of the housing crisis and recession, but fear has not dissipated about financial penalties.

Banks stand to lose a lot if a claim against them is successful. That’s why many have gone back to the drawing board to review their practices in full, carefully reviewing loans for any potential mistakes early on. Those borrowers who fall on the line may be denied a loan at all because of a bank’s concern about cutting it too close. The long-term impact, according to those supporting these new proposals, is that qualified borrowers are being shut out of the process before they even get a chance.

The new proposals would all place limits on the Justice Department’s ability to pursue banks allegedly making mistakes. In the past few years, the Justice Department has been at the helm of lawsuits intended to stop banks from making mistakes that can put home loans in jeopardy. If it is determined that loan paperwork has errors, the lender could be held liable for three times the claimed damages. The new proposals argue that lenders should only face those triple-the-damages penalties when they recklessly or knowingly make a mistake that could destroy the loan’s insurability.