Dodd Introduces Homeownership Preservation And Protection Act

Posted by Orb Staff on December 13, 2007 No Comments
Categories : Residential Mortgage

Sen. Chris Dodd, D-Conn., current chairman of the Senate Banking Committee, has introduced the Homeownership Preservation and Protection Act of 2007, which is designed to protect borrowers from abusive lending practices.

According to Dodd's office, the bill will ‘prohibit brokers from steering prime borrowers to more expensive subprime loans, create a fiduciary duty for mortgage brokers towards borrowers, and provide for a duty of good faith and fair dealing toward borrowers for all lenders.’ In addition, the bill will require analysis of subprime borrowers' ability to repay loans – and prohibit yield spread premiums and prepayment penalties on these and other nontraditional mortgages.

Borrowers would also be given additional power to take action against lenders who do not follow the guidelines. ‘Unlike current law, which puts the burden on the borrower to find the party responsible for causing the harm, the legislation allows the borrower to go directly to the current mortgage holder for a cure,’ Dodd's office explains.

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