WASHINGTON — The House Financial Services Committee reported out a bill late yesterday to prevent future mortgage-related abuses.
The Mortgage Reform and Anti-Predatory Lending Act of 2007, approved 45-19, would establish a licensing and registration system for mortgage originators, create a minimum standard requiring that borrowers have a reasonable ability to repay, and will attach a limited liability to secondary market securitizers.
Earlier this week, House Financial Services Committee Ranking Member Spencer Bachus threw his support behind the bill, which is co-sponsored by Chairman Barney Frank (D-Mass.).
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CUNA and NAFCU expressed some concerns in letter to the Hill that federally regulated depository institutions should not have to be licensed. That was backed down to a simple registry with licensing for unregulated entities. Still, NAFCU Director of Legislative Affairs Brad Thaler said creating this database would come at a cost to financial institutions.
Also, on the right of rescission/ability to repay provision, NAFCU was concerned that a time limit be set for a borrower to come back and challenge a mortgage as unsuitable to them or some type of liability safe harbor. CUNA simply wrote in its letter that subjective definitions should be worked out through regulation.
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