Industry News

Congress drafting bills aimed at predatory lending

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Democratic lawmakers are drafting bills that would impose new restrictions on mortgage lenders and loan servicers. The bills would ban yield-spread premiums and prepayment penalties on higher-priced loans, and increase liability for mortgage brokers and investors who buy securities backed by mortgage loans. Sen. Christopher Dodd -- a presidential hopeful and chairman of the Senate Banking Committee -- released details of a proposed bill Wednesday that has the endorsement of groups including the NAACP, the AARP, and the Center for Responsible Lending. The bill proposed by Dodd, D-Conn., would expand the Homeownership and Equity Protection Act (HOEPA) to cover more loans, and create good faith and fair dealing requirements for lenders and brokers. Rep. Barney Frank, D-Mass., is reportedly proposing similar measures in a draft bill now being circulated, and wants to see investors who buy mortgage loans made liable for practices defined as predatory. Consumer groups includin...