House Committee Talks Mortgage Reform

Posted by Orb Staff on April 24, 2009 No Comments
Categories : Residential Mortgage

rtgage Reform and Anti-Predatory Lending Act of 2009 ‘does not establish a national standard for mortgage lending that replaces the uneven patchwork of state mortgage lending laws,’ according to David Kittle, chairman of the Mortgage Bankers Association (MBA). Kittle's comments came in a hearing held by the House Committee on Financial Services, in which lawmakers and industry participants discussed the recently proposed [link=http://www.mortgageorb.com/e107_plugins/content/content.php?content.3247][u]H.R.1728[/u][/link]. The bill, introduced last month by North Carolina Reps. Brad Miller and Mel Watt and Committee Chair Barney Frank, is modeled after North Carolina's predatory lending statute. The bill's prohibitions against steering are "unclear, overly broad and unnecessarily prohibit incentive-based compensation to loan officers," Kittle added, referencing one of the bill's most polarizing provisions. Michael Calhoun, Center for Responsible Lending's (CRL) president, however, views the steering rules as not powerful enough. H.R.1728 currently prohibits "abusive or unfair lending practices," but Calhoun and the nonprofit CRL would like the bill to "preclude steering consumers to loans more costly than those for which they qualify or prohibit certain types of mischaracterizations of information," he said. Housing Policy Council President John H. Dalton also weighed in on the steering debate, warning about the unintended consequences that could result from the bill's language. He argued that, in its current form, the bill does not provide ample incentive pay for employees processing particularly time-consuming loan products, such as Federal Housing Administration loans or Veterans Affairs loans. "Employees will not want to work on such products because their total compensation will be less than if they process easier loans with higher principal amounts," Dalton noted. SOURCE: House Committee on Financial S

Register here to receive our Latest Headlines email newsletter




Leave a Comment