On May 24, the House Subcommittee on Financial Institutions and Consumer Credit and the Subcommittee on Housing and Community Opportunity held a joint hearing on “Legislative Solutions to Abusive Mortgage Lending Practices,” which addressed HR 1295, also known as the Ney-Kanjorski Responsible Lending Act. HR 1295 proposes a uniform national standard, addressing concerns with predatory lending in residential mortgage lending.
Testifying at the hearing were representatives from 10 different community and trade organizations. Panel members advocated a wide range of solutions to predatory lending, including creating a strong national regulator to monitor the mortgage lending market and preemption of some or all state mortgage lending laws. Many panel members also expressed a desire to offer consumers better education programs.
The National Association of Mortgage Brokers, which has been very vocal in its support for a nationwide registry and stronger licensing and education requirements for all mortgage originators, sent President Jim Nabors, CRMS on its behalf.
“NAMB supports efforts to expose and combat abusive lending tactics, provided that these efforts do not inadvertently diminish consumer access to affordable credit or inhibit the ability of mortgage finance professionals to work closely with consumers throughout the home buying process,” said Nabors.
The congressional members in attendance at the hearing uniformly agreed on the need to end predatory lending and to create better consumer protections in the residential mortgage lending arena. While many of the congressmen and women disagreed as to the extent that state laws should be preempted, they all advocated stronger federal regulation.
Nabors stated, “Mortgage lending has become largely a nationwide industry, with a number of lenders operating in all 50 states. It is incredibly burdensome and confusing to brokers and lenders to comply with 50 different state and local lending restrictions.”
The Ney-Kanjorski bill is intended to provide more consumer protection against high-cost mortgages by tightening the current HOEPA provisions in the Truth in Lending Act, improving mortgage servicing responsiveness, tightening appraisal requirements and establishing minimum standards for mortgage brokers.
For a copy of HR 1295, visit www.house.gov.