Idaho Congressman Mike Simpson today voted to support mortgage reform legislation. H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, passed the U.S. House of Representatives with a vote of 292-127.
 
“The recent credit crisis caused in the home mortgage industry has sent shock waves through our economy,” said Simpson. “We will continue to feel the impact of this predicament for many months and Congress should ensure that there is adequate transparency in the subprime loan industry.”
 
In recent years, the proportion of subprime loans compared with all home loans has risen dramatically from 8.6 percent in 2002 to almost a quarter of all home loans in 2006. Subprime mortgages are often taken out by borrowers with weak credit history who would otherwise not qualify for a home loan.
 
“While subprime loans have given a number of American families the opportunity for homeownership, there is serious concern that these mortgages are not well-regulated and that borrowers were not sufficiently informed about the risks of borrowing at subprime rates,” Simpson continued.
 
H.R. 3915 establishes minimum standards for state licensing and registration of mortgage loan originators. The bill also sets forth a duty of care standard by requiring mortgage originators to make reasonable determination that the consumer has the ability to repay the loan.
 
“This legislation preserves the role of states in the mortgage licensing system and allows states like Idaho to continue efforts to modernize oversight of the mortgage industry,” Simpson said. “The bill also expressly prohibits class action lawsuits in most cases, providing adequate remedies for victims of predatory lending without leaving lenders vulnerable to frivolous lawsuits.”