Providing for Further Consideration of H.R. 1728, Mortgage Reform and Anti-Predatory Lending Act

Floor Speech

PROVIDING FOR FURTHER CONSIDERATION OF H.R. 1728, MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT -- (House of Representatives - May 07, 2009)

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Mr. POLIS. I rise in support of the rule, and ask my colleagues to join me in voting ``yes'' on the rule and the underlying bill.

I'd like to thank my colleagues, Representative Miller, Representative Watt, and Representative Frank, for their instrumental role in bringing this package on mortgage lending reforms to the floor, as well as the committee staff that worked tirelessly on this bill.

In Colorado and across the country, we have seen the house of cards built by Wall Street collapse onto Main Street. Hungry commodities traders needed a constant supply of raw materials--namely, new mortgages--to be cut up, bundled together, and shipped out to keep Wall Street executives flush in commissions. But these exotic loans turned into a very common problem for our communities, as risk was outsourced.

``Volume and profit at all cost'' became the paradigm, and production, regardless of quality, was rewarded handsomely. With the knowledge that someone else would be responsible, lenders abandoned prudent underwriting standards, knowing they could sell the loan to someone else before the ink even had a chance to try.

We frequently hear about homeowners who bought more than they could afford, but predatory lenders set their sights on a wide range of prey, including low-income families, minorities, and the elderly. People who had considerable equity in their home were deceived into refinancing with an ``offer you can't refuse.''

As these poisonous loans reset, families lost a lifetime of equity to foreclosures. In Adams County, which I have the honor of representing, predatory lenders preyed on minorities and low-income families and turned once-thriving working class communities into a sea of foreclosure signs.

Clearly, losing a home is a traumatic experience for a family, but foreclosure has a broader negative impact on the entire community. Foreclosures drive down the value of other properties, resulting in declining revenues for local governments. Municipalities are forced to provide fewer services and even take police off the streets or teachers out of the classroom.

A mortgage is a private agreement between a borrower and a lender. However, the potential for disastrous and systemic impacts on communities when these deals go bad is, unfortunately, all too clear. Therefore, it is the obligation of Congress to ensure that these loans are made with the highest ethical standard.

The Mortgage Reform and Anti-Predatory Lending Act will give consumers the confidence to return to the marketplace and bring much needed stability to the lending industry.

Madam Speaker, the majority of the lending industry has learned that being on the side of customers is best for the bottom line. Lenders who are doing the right thing by their customers need more than recognition; they need tools to do more.

I would like to thank the committee and Chairman Frank for accepting my amendment that will allow lenders to give additional weight to their customers' mortgage payment history when refinancing loans.

If a family is struggling due to reduced income, unexpected health care costs, or the rising cost of education for their children, the last thing they need is to add foreclosure to the list of their problems.

Too often, hardworking American families who pay their mortgages are turned away because credit blemishes in other areas prevent them from refinancing their hybrid loan. My amendment would give banks the option of considering their payment history with their bank in establishing the terms for resetting a mortgage.

Lenders know that preventing foreclosure is in their best interest. Allowing lenders to refinance hybrid loans would help families stay in their homes.

I urge a ``yes'' vote on the bill and the rule.

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