WASHINGTON — House Financial Services Committee Ranking Member Spencer Bachus (R-Ala.) and other leading Republicans on the committee introduced a bill aimed to curb unscrupulous lending practices.
The Fair Mortgage Practices Act, which they called "the culmination of a 16-month effort to achieve a bipartisan solution, creates a national registration and licensing for mortgage originators; increases transparency by simplifying disclosures; "encourages" lenders to evaluate repayment ability in underwriting; increases support for housing counseling; restricts prepayment penalties on hybrid ARMs; requires escrow accounts for tax and insurance on subprime loans; beefs up enforcement of mortgage fraud; and improves the integrity of appraisals.
Representatives Paul Gillmor (R) and Deborah Pryce (R), original co-sponsors, have seen serious repercussions of the housing market change in their home state of Ohio with foreclosures three-times the national average. "Homeownership should remain the American dream, not a nightmare,"
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Gillmor said.
"There is no larger consumer protection issue facing my home state of Ohio…" Pryce added. "While many foreclosures result from serious illnesses and job loss, it is obvious that aggressive lending, an abundance of subprime loans, and predatory lenders have helped to create a crisis in Ohio."
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