In her ongoing fight to combat the record number of foreclosures in our country, Representative Marcia L. Fudge voted for the Mortgage Reform and Anti-Predatory Lending Act.  Reckless lending practices are a leading cause of the mortgage crisis putting millions of middle-class homeowners at risk of losing their homes. The Act, which protects mortgage borrowers from some abusive and predatory lending practices, passed the House of Representatives.

The Mortgage Reform and Anti-Predatory Lending Act of 2009 strengthens restrictions on compensation paid to mortgage lenders and brokers.  Today, some mortgage lenders deceptively pay brokers extra fees for loans they write at higher interest rates than normally available to borrowers. The rates are unreasonable and borrowers are often subsequently forced into foreclosure.  Rep. Fudge believes such arrangements are an indefensible conflict of interest and must be stopped.

A key element of the Act prohibits lenders from underwriting unreasonable loans and prohibits practices that increase the risk of foreclosure. Consumers should only refinance when they will receive a tangible net benefit.  The Act supports lenders making 30-year, fixed-rate, fully documented loans rather than the record number of unstable loans marketed today.  It also provides greater protections for renters of foreclosed properties like requiring a mandatory 90-day notice to vacate instead of the arbitrary practices used nationwide.

“This legislation is crucial in curbing the predatory practices of the past. Mortgage lending reform is a vital piece of the Congressional effort to prevent future financial services disasters.  Congress cannot, and will not, ignore the fact that lax regulation of this industry has left far too many consumers unprotected,” said Rep. Fudge.

In the Eleventh Congressional District, the Center for Responsible Lending projected 5,566 foreclosures in 2009 and 18,531 foreclosures over the next four years. In Ohio, the projection is even more grim--87,500 foreclosures in 2009. Many families are facing foreclosure because they borrowed money against their homes to pay their bills when j due to job loss, serious illness, divorce or major home repairs. Approximately 72 percent of subprime mortgages from 1998 to 2006 are refinances, not loans to purchase homes.

"We should do more to protect consumers from deceptive lenders by ensuring that mortgage brokers and agents are properly trained and held accountable for their loan practices. This is why I introduced the Predatory Mortgage Lending Practices Reduction Act of 2009," stated Rep. Fudge.

For more information on the Mortgage Reform and Anti-Predatory Lending Act of 2009 please click here.