Mortgage Reform and Anti-Predatory Lending Act

Floor Speech

MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT -- (Extensions of Remarks - May 07, 2009)

SPEECH OF HON. CHRIS VAN HOLLEN OF MARYLAND
IN THE HOUSE OF REPRESENTATIVES

The House in Committee of the Whole House on the State of the Union had under consideration the bill (H.R. 1728) to amend the Truth in Lending Act to reform consumer mortgage practices and provide accountability for such practices, to provide certain minimum standards for consumer mortgage loans, and for other purposes:

* Mr. VAN HOLLEN. Mr. Chair, I rise today in support of H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act.

* This country is in the midst of a foreclosure crisis. After experiencing the effects of the first wave of foreclosures last year, we are now hearing warnings of a second, more harmful wave of subprime and predatory loan inspired foreclosures in the year ahead.

* While everyone pays when a home is foreclosed upon, the people hit hardest are the elderly--who are easily deceived, the poor--who have few options, and people of color--who are often not informed fully about all their options. For decades, predatory lenders have targeted American borrowers of color with subprime and predatory loans. In a 2005 Federal Reserve study, it was shown that African Americans were 3.2 times more likely to receive a higher cost, subprime loan than Whites. Latinos were 2.7 times more likely.

* This bill targets the harmful practice of unfairly issuing subprime loans or using predatory lending to take advantage of borrowers.

* While the legislation is not perfect, it does have some key provisions that are desperately needed.

* Among its many useful provisions, H.R. 1728 establishes an ability-to-repay standard whereby the lender must determine that the borrower has a reasonable ability to repay the loan, present a net tangible benefit to homeowners seeking to refinance, and ensure that the loan cannot have any predatory characteristics.

* H.R. 1728 also establishes a safe harbor for qualified, 30 year fixed loans. Doing so will help shift the incentives away from exotic mortgages.

* And, the bill establishes protections for tenants who can be made homeless if their landlord fails to pay the mortgage. This bill gives tenants the right to remain in their homes until the end of their lease. If they do not have a lease or if the property is purchased, then tenants must be given 90-day notice to vacate.

* These are important and necessary protections for homeowners and renters. I encourage my colleagues to join me today in voting for H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act.

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