Press Coverage
Mortgage Bill Gets Bachus' Blessing
American Banker
November 6, 2007
Rep. Spencer Bachus of Alabama, the lead Republican on the House Financial Services Committee, said Monday that he would support a mortgage reform bill authored by Rep. Barney Frank, D-Mass., the panel's chairman, after several changes were made. The legislation, which is expected to clear the committee after a vote that could be held as early as today, would rein in underwriting standards for all originators and create limited liability for securitizers that package loans on the secondary market. The manager's amendment of the bill makes several changes to the bill Rep. Frank introduced last month, including stripping subjective terms that would have required loans to be in a borrower's best interest. The language had drawn the banking industry's objections. Instead, the bill would require originators to ensure that borrowers could repay their loans. The revised version also would require regulators - including the Federal Reserve Board, which had been excluded from the original version - to enforce the standards and would give them enhanced leeway to determine standards governing what types of loans should be exempted from legal liability on the secondary market. The changes helped win the support of Rep. Bachus and at least two other Republicans.