Idaho Congressmen Mike Simpson and Walt Minnick today voted to reform mortgage lending and protect Idaho consumers from predatory loan practices.
The bill, HR 1748, passed the House of Representatives and now goes to the U.S. Senate.

"Some of the key reasons for our nation’s economic crisis were the irresponsible choices made by some lenders and borrowers alike," Minnick said. "These reforms will bring much-needed accountability to the process. The bill will also better protect our financial system by making sure borrowers don’t buy more than they can afford and by making sure that all lenders follow the best practices shown by responsible lending institutions."

"The mortgage crisis has been at the root of the financial turmoil and economic recession facing our nation," Simpson said, "And I strongly believe that addressing the high rate of foreclosures and plummeting value of homes is necessary for our economy to recover.  I believe this bill is a balanced and appropriate response to ensure that homeowners can make financial decisions that are in the best interests of their families."

The bill makes several important reforms to current federal loan standards for mortgages. Lenders would be required to better vet borrowers and their ability to pay. The bill also prohibits unfair lending practices, imposes penalties for irresponsible lending and protects tenants who rent homes that go into foreclosure. (See information below for more details.)

The bill included a key amendment authored by Minnick. The amendment requires creditors to retain an economic interest of at least 5 percent for each loan that the creditor sells or transfers to another entity.

"I am honored to have helped craft such an important piece of legislation," Minnick said. "It’s important that we bring real accountability to the process so Americans can be assured that we won’t have another severe loan crisis."