Industry News

House Democrats unveil anti-predatory-lending bill

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House Democrats on Monday introduced legislation that would require all mortgage loan originators to be licensed, and would create new restrictions on their activities -- including prohibitions on steering borrowers into loans that are "not in the consumer's interest." The product of months of hearings, "The Mortgage Reform and Anti-Predatory Lending Act of 2007" would create new minimum standards for all mortgages -- including a requirement that lenders make good-faith determinations of a borrower's ability to repay. Lenders would also be prohibited from making refinance loans that don't provide "a net tangible benefit to the consumer," the bill's sponsors said in a summary of the legislation. In addition, the bill would create liability for some investors who purchase loans that don't meet the minimum standards, and also the companies that securitize them for sale to investors. The lending industry has opposed giving borrowers who claim to be victims of predatory or decep...