Rep. Andrews Supports Legislation to Protect Homeowners

I am proud to announce that The U.S. House of Representatives last week approved H.R. 3915, the Mortgage Reform and Anti-Predatory Act of 2007.   This bipartisan legislation will address future mortgage lending practices, help to prevent another mortgage crisis and enact sensible regulation that will give homebuyers, lenders and investors confidence in the marketplace.
The legislation, the Mortgage Reform and Anti-Predatory Act of 2007, was approved last week by a vote of 291 to 127.  This bill amends the Truth in Lending Act to set forth a duty of care standard for residential mortgage loan originations.

H.R. 3915 seeks to protect homeowners.  For example, it sets forth defenses to foreclosures and requires pre-loan counseling.  In addition, it directs the Secretary of Housing and Urban Development and other specified federal banking regulatory agencies to prescribe jointly regulations to prohibit mortgage originators from steering any consumer to a residential mortgage loan that is not in the consumer's interest.

It proscribes certain practices, including: (1) certain prepayment penalties; (2) single premium credit insurance; (3) mandatory use of arbitration; and (4) negative amortization mortgages.

It sets forth minimum repayment standards for residential mortgage loans. Requiring creditors to determine based on verified and documented information, that a consumer has a reasonable ability to repay the loan, according to its terms, and all applicable taxes, insurance, and assessments.

The bill also prohibits certain creditor practices with respect to high-cost mortgages, including: (1) recommending default on an existing loan or other debt before and in connection with closing of a high-cost mortgage that refinances all or any portion of such existing loan or debt; (2) imposing late fees except according to specified requirements; (3) exercising sole discretion to accelerate indebtedness; (4) financing points and fees; (4) structuring certain transactions and reciprocal arrangements to evade the requirements and prohibitions of this Act; and (5) charging certain modification or deferral fees, and fees for notification of payoff information.

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