Inman News reports: "The House of Representatives Thursday approved controversial legislation intended to combat predatory lending, amending some provisions to address criticism that the bill could worsen the credit crunch, but strengthening others." Click here for the full article.
"HR 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, would create a national licensing system for mortgage loan originators and require lenders to determine that borrowers have a reasonable ability to repay a loan. The bill would also create limited liability for companies that bundle mortgages for sale to Wall Street investors."
"The House bill's most contentious restrictions include a ban on incentive payments brokers and loan officers receive when they place borrowers in high-cost loans, and prohibitions on prepayment penalties used to discourage borrowers from refinancing their loans." Click here for the full article.
According to the American Banker:
A last-minute effort by Democrats to toughen liability standards in a mortgage reform bill up for a vote in the House Thursday raised consternation in the lending industry but ultimately fell flat, along with other amendments designed to beef up consumer protections. Click here for the full article.
A day after the House passed sweeping mortgage reform legislation with significant bipartisan support, Senate Banking Committee Chairman Chris Dodd said Congress may not need to act. Click here for the American Banker article.
On a conference call with reporters Friday, Sen. Dodd said rules due to be proposed next month by the Federal Reserve Board to curb abusive lending practices may be sufficient.
"Nothing would please me more than for the Fed to come out with a very strong set of regulations that deal exactly with the problems we're talking about, that put a stop to these predatory lending practices that [are] going on there," he said. "If they do that, there's no necessity for a bill here. So I'm anxious to hear what they have to say."
Here is what others are saying about the proposed federal legislation: