Home

Blog

H.R. 1728, The Mortgage Reform and Anti-Predatory Lending Act

  • This item is from the 111th Congress (2009-2010) and is no longer current. Comments, voting, and wiki editing have been disabled, and the cost/savings estimate has been frozen.

Version saved on May 13, 2009, 07:33:23, by webmaster:

H.R. 1728 would 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.

Detailed Summary

Mortgage Reform and Anti-Predatory Lending Act - Amends the Truth in Lending Act to specify duty of care standards for originators of residential mortgages.

Prohibits steering incentives in connection with origination of mortgage loans.

Directs the federal banking agencies to prohibit or condition terms, acts, or practices relating to residential mortgage loans that are abusive, unfair, deceptive, predatory, inconsistent with reasonable underwriting standards, or not in the interest of the borrower.

Prescribes minimum standards for residential mortgage loans, including a mandatory net tangible benefit to the consumer for refinancing a residential mortgage loan.

Subjects a creditor to civil actions for rescission of a residential mortgage loan in the case of specified abuses. Limits the liability of good faith assignees or securitizers of a residential mortgage loan to loan rescission and certain other obligor costs.

Permits a consumer to assert a right to mortgage loan rescission as a defense to foreclosure.

Prohibits specified practices, including: (1) certain prepayment penalties; (2) single premium credit insurance; (3) mandatory arbitration (except for reverse mortgages); (4) mortgage loan provisions that waive a statutory cause of action by the consumer; and (5) mortgages with negative amortization.

Sets forth certain tenant protections in the case of foreclosure.

Increases civil money penalties for certain violations.

Exempts a creditor, assignee, or securitizer from liability and rescission in the case of borrower fraud or deception.

Requires a six-month notice before a hybrid adjustable rate mortgage is reset.

Requires federal banking agencies to prescribe regulations requiring any creditor that makes a residential mortgage loan that is not a qualified mortgage to retain an economic interest in a material portion of the credit risk if the creditor transfers, sells, or conveys such loan that to a third party.

Prescribes mandatory disclosures in monthly statements for residential mortgage loans.

Directs the Secretary of Housing and Urban Development (HUD) to establish a grants program to provide legal assistance to low- and moderate-income homeowners and tenants regarding home ownership preservation, foreclosure prevention, and tenancy associated with home foreclosure.

Prohibits a high-cost mortgage from containing: (1) a scheduled payment that is more than twice as large as the average of earlier scheduled payments (balloon payments); or (2) a provision which authorizes creditor discretion to accelerate the indebtedness.

Prohibits a creditor from: (1) lending without due regard of the mortgagor's ability to repay; (2) recommending or encouraging default on an existing loan or other debt before, and in connection with, the actual or planned closing of a high-cost mortgage that refinances all or any portion of such existing loan or debt; (3) taking action in connection with a high-cost mortgage to structure a loan transaction as either an open-end credit plan or another form of loan in order to evade this Act; or (4) engaging in the unfair act or practice of flipping in connection with a high-cost mortgage.

Imposes certain limits and conditions on the charging of late payment charges.

Establishes pre-loan mortgagor counseling as a prerequisite to a high-cost mortgage.

Expand and Preserve Home Ownership Through Counseling Act - Establishes within HUD the Office of Housing Counseling.

Amends the Housing and Urban Development Act of 1968 to require the Secretary to: (1) prescribe counseling procedures; and (2) provide financial assistance to state and local governments and nonprofit organizations offering homeownership or rental counseling.

Directs the Secretary to study and report to Congress on the root causes of home loan defaults and foreclosures.

Amends the Real Estate Settlement Procedures Act of 1974 to: (1) direct the Secretary to prepare a mortgage information booklet to help applicants for federally related mortgage loans understand the nature and costs of real estate settlement services; and (2) set forth specified servicer prohibitions.

Amends the Truth in Lending Act to require a creditor, in connection with a consumer credit transaction secured by a first lien on a principal dwelling, to: (1) establish an escrow or impound account in a federally insured depository institution for the payment of taxes, hazard insurance, and other specified required periodic payments; and (2) provide specified disclosures to a consumer who waives the escrow service.

Directs the Secretary to study and report to certain congressional committees on the fraud and abuse potential of certain mortgage servicing practices.

Specifies property appraisal requirements.

Makes unlawful certain unfair and deceptive practices relating to a consumer credit transaction secured by the consumer's principal dwelling.

Amends the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 with respect to appraisal subcommittee, appraiser independence, and approved appraiser education.

Directs the Comptroller General to study possible improvements in the appraisal process.

Amends the Equal Credit Opportunity Act to condition the requirement that a creditor furnish a mortgage applicant with a copy of all property appraisal reports upon a specific written request by the applicant.

Status of the Legislation

Latest Major Action: 5/12/2009: Referred to Senate committee. Status: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Points in Favor

(Log in to edit the wiki and be the first to show why the bill should pass!)

Points Against

(Log in to edit the wiki and be the first to show why the bill should not pass!)

« Return to Revision History.


From the Blog

Cost Estimate for H.R. 1728

The Mortgage Reform and Anti-Predatory Lending Act, scheduled for the House floor this week, would cost the average U.S. family about $4.00. SHARETHIS.addEntry({ title: "", url: "" });...

Visitor Comments Comments Feed for This Bill

Jim C

March 28, 2009, 6:42pm (report abuse)

Hopefully this legislation is passed quickly in order to prevent future lender missteps and damaging consumer financial situations.

Jb

March 31, 2009, 3:32pm (report abuse)

This bill will decrease the amount of options we have and increase the costs of getting a mortgage.

Jim C

March 31, 2009, 8:52pm (report abuse)

We can easily do without mortgages which do not account for taxes, insurances, probability that the loan will be repayable after the initial teaser period. The only remote reason that the cost of mortgages would go up is because the discount was paid for off the backs of people setup toward foreclosure and burdened with heavy deficiency judgments. I have yet heard of a satisfied customer set into a loan which escelated 40% or more after reset. Not many are able to pay once the burden is increased to that substantial increase. Removing the ability to make loans with these low standards is positive for future loans by reduced foreclosures and a lesser burden on people from possible deficiency judgments depending on the laws of that state. I welcome the improvements to TILA.

Jb

April 1, 2009, 10:12am (report abuse)

Jim,

I am not sure that I follow your logic? "We can easily do without mortgage" How would you like people to purchase homes? As far as the cost of a mortgage going up is simple, by only have a few companies doing loans what prevents them from increasing their costs they will no longer have any competition. When is the last time you have heard of a company that has less competition decreasing their costs? As far as on people being dis-satisfied with their loan yes some people were given loans that were bad, but when did we stop taking responsibility for our actions. I have a mortgage and you know what I read the paper work to make sure it was a loan that I wanted. It's easy to say no I want a fixed rate loan. Take responsability for your actions, it's not the goverments responsibility to make your decisions. I also welcome the changes just do not destroy the industry.

JimC

April 3, 2009, 8:06pm (report abuse)

We can do without mortgages which go up in payments well over 44% of the initial payment when it reaches the first reset. Mortgages at rational rates can still be issued.

The simple point in the matter is that lending institutes could either make affordable terms or deny financing in the first place. Without regulation we get loans with atrocious and economically damaging underwriting. It is no different than making legislation for safety for speeds on certain roads, safety from toxic substances and disease ridden pollutants in food. The regulations set a minimum standard and do not prevent better termed loans, There is nothing related to government interference with minimal standards to conform to.

This legislation needs to pass. The taking responsibility is in the lending arena. Safe products demanded since voluntary compliance failed to underwrite sustainable loans is the best method to prevent future catastrophes since lenders will not be able to originate toxic mortgages.

Broker

April 23, 2009, 9:33pm (report abuse)

HR 1728- You can not pass a bill giving tenants 90 days notice, when owner occupants who would purchase any property have a 30 day lock on a loan, have given a 30 day notice to vacate to purchase a home. You will effectively stop all sales of any foreclosed Real Estate, turn them all into Rental Housing, with the lenders liable for tenants who try to injure themselves in a property to garner a lawsuit against a corporation. Of course not one party in Government knows one thing about Real Estate Sales or Mgmt.

Gov. is doing more and more to stop the Real Estate Market from correcting itself.

Tenants in foreclosed properties, have stopped paying their rent as well, as the notices are mailed to the homes they occupy, They know the property is going into foreclosure in 70% of the cases. No working person will get a mortgage with this bill, We can RENT from the King, back to the Feudal system, where the KING,,(GOVERNMENT) owns all the Real Estate we serfs can all rent from the KING.

Jim C

April 24, 2009, 6:55am (report abuse)

I really would prefer that all foreclosures were to stop. A three month notice to tenants would be a positive move. No tenant wants to pay money out in good faith and only be evicted by bad investors allowing the properies to be taken over.

This legislation will only add minimum standards to a currently cruel and unregulated industry. It has little to do with government owning properties.

Former Lender

April 28, 2009, 10:50am (report abuse)

Jim C.

You sound like a nice guy, but it is clear that you really don't understand the workings of the mortgage industry and the destructive nature of this legislation as it is written. Yes, some change and regulatory restructuring is needed, but this will only hurt consumers.

Don't feel bad about not understanding the industry - most in Congress are absolutely clueless, including those writing the bills and those running the committees. Sad for the consumer.

Mike H

April 29, 2009, 4:01pm (report abuse)

The way the bill is written currently will hurt the consumer the most. It will limit options and will force a buyer to pay higher fees to obtain home ownership.

I hope congress does not rush into this without understanding the impact it will have.

Land Lord

April 29, 2009, 5:19pm (report abuse)

So the government thinks that if the borrower is not making their payment then the renter should get to live their rent free? Why? Two wrongs don't make a right. There is already "an assignment of rents" clause in most loan documents. We do not need more rules, we just need to enforce the rules and laws we have in place.

These news proposed laws are doing nothing, except getting politicians more press. There are soo many real estate laws, appraisal laws, fraud laws that we violated - enforce the laws.

Jim C

April 29, 2009, 5:50pm (report abuse)

I believe this bill has passed the house panel and should be up for a vote. Many views on the issue of regulation. I believe limitations via laws to protect consumers from steering attempts and from loans that could not possible be successfully repaid need kept off the market. The market failed to underwrite appropriately and are also fighting to assure the bad lending instruments fail and cannot be revised. Prevention over cure, but the cure needs applied to remove the poorly underwritten loans.

Joe S

April 30, 2009, 9:21am (report abuse)

Mortgage costs WILL significantly rise - guaranteed!

Why do we continue to elect people that punish the 95% that have the right and proper business model and not punish the offending 5%?

Get out and VOTE!

LongTermMtg

April 30, 2009, 9:52am (report abuse)

Has H.R. 1728 passed? There seems to be no mention in the press - which seems odd. If it has passed, is it now moving to the Senate?

This will definitely hurt consumers - just as the HVCC has already begun to drive up the cost of the mortgage loan.

Loan_Officer

April 30, 2009, 3:36pm (report abuse)

Eliminating YSP is what to do if you are a moronic politician interested in a quick soundbyte on NBC, to make it seem like you are looking out for the average American. But what you are really doing is screwing them. You will raise the cost of refinancing, take away a whole lot of choice of who to do business with, and force one side of an entire industry into unemployment - further harming the economy.

YSP is already disclosed to the consumer. It is on the Good Faith Estimate every time, and certainly on every HUD-1 Settlement Statement. It's a valuable part of the loan process, as it offers borrowers a way of taking a slight hit to their rate for the purpose of receiving cash back from the lender than can be used as a credit towards closing costs. It is EXACTLY the same thing as getting a slightly higher rate by going with Ford financing when buying a new Ford, which will result in a higher rate than you'd get at your local bank, to get the $3000-$4000 in cash-back.

GA_Appraiser

April 30, 2009, 3:53pm (report abuse)

"It is EXACTLY the same thing as getting a slightly higher rate by going with Ford financing when buying a new Ford, which will result in a higher rate than you'd get at your local bank, to get the $3000-$4000 in cash-back."

This is what is wrong with this country. It is a mental illness. Screw the longterm for short term happiness.

And while we are at it, get the appraiser to go ahead and stretch the value another $5K so we can give the cash the borrower DESERVES!

We did not get in this mess with appraisals inflated $50K at a time. It creeped in $3K-$5K at a time with LO's shopping for an appraiser until they found one that was either clueless or had no balls. "I am not that good" is the lie that appraisers bought into day after day, only so they could "stretch" it a few grand to keep the loan officer.

Relationship business in the financial sector has got to either become more transparent or end.

Loan Arranger

April 30, 2009, 4:27pm (report abuse)

It goes to the full house for vote on May 7th.

Loan Arranger

April 30, 2009, 4:31pm (report abuse)

I'm still not clear on the YSP issue. Would YSP be banned completely, or just YSP may not vary with the terms of the loan as to avoid "steering" applicants toward more costly mortgages?

Jim C

April 30, 2009, 7:16pm (report abuse)

As far as I know, the bill was released from some panel with about 40 amendments offered.Hopefully this legislation will pass and prevent steering, over appraisals, loans with teaser rates that go to non affordable rates after the teaser period. There are quite a lot of loans going into foreclosure after the loans pass the teaser period. It is obvious the loans were not made to go the full length of the terms.

If proper legislation was in place originally, we would not have so many loans issued with defaulting expectations.

Darth Mae

May 1, 2009, 2:24pm (report abuse)

Jim,

What is your occupation? Your grasp of true history in regards to the mortgage industry of days past is as weak as your command of the english language. I AM a sub-prime mortgage broker, I WROTE a fair number of 2 and 3 year ARM's, and I was able to refinance 85% of those clients into conforming fixed-rate maortgages PRIOR to the collapse of the industry. You have no idea how many homes, and families those instruments saved post-9/11. Better make sure the paint you are spreading is any good before you start using such a broad brush. Per Se, those instruments were handy as heck. There were MUXH bigger issues that ruined the mortgage industry, then brought down our economy.

Loan Arranger

May 1, 2009, 4:12pm (report abuse)

Darth, Not withstanding your command of the English language and spelling...as a lender, what specific components of 1728 do you object to? Just so you know, I am also a lender and do object to some of the critical components that could further devastate the housing market..ie..YSP treatment and definition or Originator, as well as the cost of the industry to comply with the individual licensing component. As is, 1728 would further contract the consumer availability of mortgage financing and increase the cost of what is left for the consumer. I couldn't tell from your comment where you stand, other than you saw or see a benefit in 2/3 year ARM products. Be sure to write you representative with your specific objections so they are more educated as they vote on this next week. Caveat- no claim of superior command of the English language on my part...I just find personal attacks have no place in healthy debate.

Jim C

May 3, 2009, 8:26pm (report abuse)

Darth ,

The mortgage industry made loans that were based on conditions which did not account for hazard insurance, county taxes or on the income potential of the family being financed for a place to raise their family. The historic type of loans when the 1978 provision in section 1322(b)(2) was set to supposedly protect those from possible losses which would raise rates is all but inapplicable when you consider the types of loans created by the mortgage industry when the protections set aside to prevent these lending industry failures were nullified. The lending industry needs sane laws to prevent too low of lending standards which do not serve the potential homeowner, crowd the courts with foreclosures and prevent people losing their residences as well as removing the made to happen catastrophe from allowing future lenders to raise the future interest rates of homeowners because of the failure of lenders to promote good lending practices. My job is technical, not English.

ESGerard

(logged-in user) May 4, 2009, 11:42am (report abuse)

Just exactly why should taxpayers offer grants to keep people in homes they cannot afford?

There are many items in this bill that are good but they are outnumbered by those, such as the above, which are slipped in between the lines of protections and responsibilities.

Loan Arranger

May 4, 2009, 7:33pm (report abuse)

ESGerard, What section in the bill refers to grants for people you describe. Everytime I read this thing I find something new, just haven't come acrosss that yet. I did see grants for govt sponsored advertising and counseling...to the tune of about $150m I think... while I get the intent...that seems like more pork that will be ineffeciently, and more importantly, ineffectively run

Ex Lender

May 7, 2009, 4:15pm (report abuse)

Darth, Loan Arranger, this bill is why I got out of the business. It's uninformed people like Jim C that, (giving him the benefit of the doubt) while saying they have the consumer's best interest in mind, totally muck up the business with stupid, ill-conceived, impractical guidelines that end up crippling an industry. HR 1728 will drive out the mortgage broker, leaving a handful of large mortgage bankers and banks making loans. Darth, your so right about the huge number of people that were helped by Subprime loans. But that's all forgotten for the sake of making the politican the hero by taking care of the big bad predatory lenders. God, when are we going to have a country with people that can think on their feet and quit looking to the government to protect and save them from every possible harm. What a pathetic population we have now. They may not know how to read mortgage paperes but they sure know who the last 5 winners of American Idol were, and who Britney is sleeping with.

CM

May 7, 2009, 4:59pm (report abuse)

I have been in this industry 15 yrs. There are GOOD and BAD in EVERY occupation. YSP being removed is only going to create monopolization of the industry and therefore force out the broker business thus increasing foreclosures, unemployment rate and weakening the economy even more. The BANKS gave the BROKERS the programs to sell. The BANKS are the ones who came out with the programs and signed off on the final loan for approval. The Brokers had NO role in the approval process or what programs were offered. They were given a product, told to sell it to people with certain income restrictions, fico score restritctions, etc. The BANKS created the ARMS, OPTION ARMS, INTEREST ONLY, 100% financing for 580 credit score using bankstatements, stated income. The BANKS did this, not the BROKERS. If we just let alone now, leave FHA and conventional as is and let the market get back to good is all we need. Too Many changes creates more problems!!

spahr

May 8, 2009, 10:55am (report abuse)

If the government would enforce the law we have and consumers would accept some personal responsibility for buying houses they couldn't afford and zero understanding of the loan the acquired, we wouldn't need this new bill!

dabear

May 8, 2009, 2:47pm (report abuse)

This bill is so bad that it could only have come from our government. Obviously, people who know nothing about the mortgage industry are busy passing laws that govern it. This only goes on to increase costs, remove consurmer options, increase processing times, which leads to more foreclosures and fewer people who can own homes- how is this good for us???? It is time to stop the Nannystate and take back our government. Go to 'www.riseupforamerica.com'!

AE

May 9, 2009, 8:16am (report abuse)

The YSP is 100% detrimental to mortgage brokers. Banks have YSP but they call it

SRP. It is the same as YSP but not realized until the loan is sold on the

secondary market. Every bank loan officer has a rate sheet with rates above and

below par. This bill would deny brokers the abilty to use above par rates to

HELP the borrower.

Brokers don't set the rates BANKS do in the form of a wholesale relationship

with the broker. The YSP is really the SRP being passed to the broker for

available use to HELP the borrower. If YSP is no longer allowed it HURTS any

borrower who uses a broker and unfairly put the broker at a disadvantage as to

how they can help the borrower.

Please if you are not in the mortgage business stay out of this discussion.

There are too many nuances that you can't understand and are not so simple as to

be able to make quick comments.

AE

May 9, 2009, 8:19am (report abuse)

Sorry,

To be clear, the elimination of YSP is detrimental to the borrower and broker. I meant to say the YSP portion of the bill was detrimental.

WildPeach

(logged-in user) May 12, 2009, 10:49am (report abuse)

I'm sorry, as a former loan closer for both conforming and non-conforming lenders and have personally witnessed the abuses that have decimated many areas of the Atlanta, Georgia areas due to the lack of regulation and control by lenders, this legislation is absolutely necessary.

YSP became a mechanism that drove many brokers to sell borrowers products that gave them more incentive to place them in loans that they knew weren't beneficial to their borrowers, but was financially lucrative to them. Without any culpablity attached and self-regulation, this practice became abused and there is a definite need to restrain.

YSP or SRP, call it what you like but even if it was designed to help borrowers, it seldom did. Some brokers neglected to pass that on to their borrowers and simply kept the money in their pockets, especially in the subprime market.

Scott

May 12, 2009, 12:18pm (report abuse)

Wild Peach You worked for a bad broker and I think that is the point. Getting rid of YSP only means you need more money down to get in a house. You can solve the deception by making ysp more visible. I have seen fraud when I owned a wholesale business and squashed it, but the broker would just go elsewhere. That is the problem. There is know where to report it and if you did it got ignored by the FBI. Period.

Scott

May 12, 2009, 12:23pm (report abuse)

This Bill is a gift to the big lenders. Anyone who understands SRP would see right through the deception of this bill. It passes they win and brokers and consumers lose.

dmoney

May 12, 2009, 11:45pm (report abuse)

This bill does nothing but hurt consumers. The secondary market has already made a majority of these changes if not all of them and the only winners are the big banks that caused all this mess. Getting rid of YSP means that consumers will pay more for loans. Guess how a bank can make a NO POINT LOAN...because they make YSP or pay their brokers YSP....This would eliminate competition which would lower supply of available loans. With demand being constant and supply dropping....prices go UP!!!!!!!!!!! That is a simple law of economics. PEOPLE DO NOT LET THE YSP PROVISION OF THIS LOAN PASS.... YOU WILL REGRET IT!

Robc

May 13, 2009, 5:19pm (report abuse)

You know what is amazing. The Realtors will make 6% on the front and back end of a real estate trasaction sometimes but that is considered NORMAL. The mortgage broker makes 1% and we are considered criminals. There is a new website out there called wwww.ratewindow.com that will allow the consumer to see DIRECT WHOLESALE pricing from the banks. Rather than not give the customer the option, lets show them what the true cost is by a 3rd party and let them decide. Why does the government feel its necessary to control everyones life? This bill will eliminate mortgage brokers and force people to use large banks. Every wonder how those big banks are able to spend 20 million on naming rights to stadiums? Ever wonder how they have branches that have 30 ft ceilings lined with marble?

Finally

May 14, 2009, 2:22pm (report abuse)

I can't wait until YSP is banned.

The only ones who think this is a bad idea are the ones making a living off of it.

Get rid of these scumbags.

Oh and Robc, banks make their money from Fractional Reverse Lending.

Not from selling exotic loans. Your loans put them in the red too.

AmishRakeFight

May 14, 2009, 4:23pm (report abuse)

This Bill and all supporters of it should go under the Rake.

johnhard

May 18, 2009, 2:14am (report abuse)

I am very pleased with the thought and don’t feel like adding anything in it. It’s a perfect answer.

john

WoW Europe Gold

Jim C

May 21, 2009, 6:31am (report abuse)

Once this legislation gets out of the Senate committee and then passed by the full Senate, we will have the lending origination part of the housing problem eliminated. There still needs to be legislation to clean up the present mess by removing exclusionary privilege that lenders with bad lending instruments enjoy at the expense of the borrower. 15 out of 100 loans is a poor claim to support predatory lending. 85 out of 100 successes is hard to believe it ever happened. Liar loans on the originator side will be eliminated once this legislation becomes law.

blink

June 1, 2009, 4:06pm (report abuse)

Finally, I am glad you are happy YSP is going away. Tell that to the 300 people I put into homes last year. I made 1-2 points on each of them (their realtors made 3-6, but they are the good guys right?), beat their banks rates, gave them all fixed rate loans and kept them from bringing more money to closing. You are similar to someone that writes garbage on a bathroom wall. Why don't you go to work tomorrow and tell your boss you want to work for free from now on? Same thing. Short-sighted idiot.

E-I-O

June 1, 2009, 9:34pm (report abuse)

This is such a farce. Too bad the American public, by and large, is misinformed to the point of falling for this hook-line-and-sinker. The loan products themselves coupled with ignorant borrowers were mostly to blame for the implosion. Now the banks want to cut the legs off the very brokers who have kept the costs of mortgages down in an attempt to help the consumer. It's be comical if it all weren't so sad. Evil YSP! Yeah, that's the ticket.

Good thing?

June 2, 2009, 12:13pm (report abuse)

Plain and simple: if we want accountability, transparencey in our financial dealings and honest practices, then this is not the right bill.

Let me explain. Almost every major bank and investment institution has received some sort of money to correct the bad business THEY created (the loan programs were sold by banks and brokers but created by the BANKS)

If this passes, the brokers cannot earn YSP (the profit on the loan which is already disclosed to the borrowers several times in the process of the mortgage loan)

Howver, and this is the kicker, the BANKS will still earn SRP (the banks equivalent of YSP) BUT they DO NOT HAVE TO DISCLOSE! and for that matter they never have!

so when this bill passes, and the broker is ultimately shut out of the business, what did we accomplish?

the banks can still offer the programs they created.

they do not have to disclose their profit (SRP) and...

if they can't seem to make it work again, they can always ask uncle Sam for more...

Jim C

June 2, 2009, 5:36pm (report abuse)

Blink, they canned the boss. We are a self sufficient entity now.

Making loans nobody can possibly pay back after their reset is bad business and should be made against the law to setup people intentionally for failure. As our newly self sufficient work environment, brokers who steer people away from positive loans so they can make more profit is not an item where it needs YSP to encourage steering people into failing loans when a loan favorable and maintainable by the consumer could have been written instead.

Good thing?

June 3, 2009, 11:30am (report abuse)

Jim C,

Can you please elaborate regarding loans nobody can pay and how YSP encourages steering?

were you aware that conventional loans currently have YSP? were you aware that FHA loans have YSP? were you aware that VA loans and USDA loans and streamline and Refi Plus (from FNMA) loans ALL HAVE YSP? are these bad loans? are we steering these first time home buyers into bad loans by helping them absorb some of the closing costs?

This is not a personal attack here, but I do want you to realize that when it comes to your money choice is a good thing. if you as the consumer do not want to use a broker, it is your prerogative, but don't remove that choice for others.

If the politicians would ever consider an open dialogue with the professionals and even a consulting group to determine the consequences of this attempt at policy they would soon understand that this is not the solution. not even close.

pandle

June 6, 2009, 3:52pm (report abuse)

The greed of consumers seems to be what is being overlooked here. I ran a large brokerage in NV and while I had to fire the occasional broker for engaging in unethical behavior, I saw far more of it on the consumer side.

People lying about actually living in the home, using straw buyers, faking rent statements. You name it. Consumers typically had far more to gain per transaction than the lender.

Secondly, I think the states need to step up their game. The lack of oversight was on a state by state basis. Some states where on point - New York for example and some states it was like the wild west- Nevada for example.

here is a list of predatory lending laws per state:

Does anyone have a list of predatory lending laws by state? The best I could find was this and it is fairly incomplete:

http://www.bankapedia.com/mortgage-encyclopedia/state-mortgage-laws

look at the disparity between states

Tom_WA

June 8, 2009, 6:56pm (report abuse)

There goes owner financing...

ARIOLLC

June 10, 2009, 7:47am (report abuse)

80% of loans are now government owned by Fanny & freddie. It's no wonder Obama wants this new bill pass. He's looking to redistribute the wealth of those who worked so hard to accomplish where they are today to those with no goals, no ambitions who want to coast thru life with no responsibility. Wake up America before the US becomes a socialist country.

Martin Andelman

June 12, 2009, 5:55pm (report abuse)

I'm the feature writer on ML-Implode and for The Niche Report. Here's my take on H.R. 1728. And remember... people say I'm funny.

http://tinyurl.com/lhco3l

Martin Andelman

June 12, 2009, 5:59pm (report abuse)

I'm the feature writer on ML-Implode and for The Niche Report. Here's my take on H.R. 1728. And remember... people say I'm funny.

http://tinyurl.com/lhco3l

Mike L.

June 12, 2009, 8:50pm (report abuse)

Martin -

Amen! I checked out your site, and then forwarded it to a ton of people. I'm a Realtor and investor, who routinely gets asked to help with seller financed transactions. This idiotic bill would put me out of business, and threaten the livelihood of 1.2Million other Real Estate agents, and millions more investors, not to mention kill the possibility of homeownership to all but a "Government Blessed" select few. I guess putting me INTO foreclosure, and making sure I stop helping people stay in their homes, and sell their homes to avoid foreclosure is something the Gov't deems a priority.

Can anyone confirm that crack pipe smoke is being pumped through the ventilation systems in Congress?

I guess we'll just have to take HR1728 as anecdotal evidence...

Philup On Deez

June 14, 2009, 5:18pm (report abuse)

Ex & Former Lender If u guys r so informed "professional" then y r u no longer doing it oh yeah that's right it was ur greedy incentives that srewed us in the 1st place & broke up millions of families caused hundreds to commit suicide. ur just mad & against this bill because it would hold all who are accountable for wrongdoing already done. hush little baby don't u cry daddy's going 2 open up washington's eye & when he sees what u've been doing, I bet u it's gonna be u they're screwing!

Jakeblue3

June 15, 2009, 5:05pm (report abuse)

What happened to free enterprise? What happened to capitalism? What happened to property owners selling their property on private contracts? What happened to small businesses engaging in mortgage brokerage? What happened to alternatives to mortgages beyond the bank criteria? What's happening to America? This bill has GOT TO BE DEFEATED!

Jim C

June 17, 2009, 6:34am (report abuse)

The heavy degree of greedy dealings that offset people's financial stability is truly not capitalism or American dream. Like any other entity, it needs to be regulated to keep the thieves from sinking Americans and world financial systems.

This bill needs passed to allow the honest and fair to make it in business while not being detoured to be policing their industry since some have no sense of fair play and have no honest intentions.

Mike L

June 18, 2009, 9:46pm (report abuse)

An individual owner of a property did not put anyone into a "liar" loan. An individual owner of property in America has ALWAYS enjoyed the right to sell his home, to anyone he sees fit, WITHOUT having the federal government or any bank involved. This bill SPECIFICALLY infringes on an American citizens property rights.

Jim C, is obviously a plant in this thread. Jim C, I'm sure, since he refuses to identify anything about himself, especially his job, is working for the Banking lobby who is responsible for cramming this through the house, and who has the most to gain.

Jim C fails to acknowledge the glaring faults in this bill, like the amendment which let’s the government seize your rental property. Check it out here: http://www.mynewplace.com/blog/2009/05/20/hr-1728-mortgage-reform-and-anti-predatory-lending-act/ -

Hmm... this bill removes consumer choice, infringes on American Citizens rights as homeowners, and gives a government agency the right to sieze your property.

Mike L

June 18, 2009, 9:49pm (report abuse)

Here's the info on the amendment that let's HUD sieze your property:

"According to the NMHC, Representative Nydia Velazquez (D-NY) successfully proposed an amendment that would allow HUD and the Treasury Department to determine if a multifamily property were “at risk" and in such cases where this classification was levied, the two agencies would foreclose on the properties and then sell them to an entity which would then convert the properties into affordable housing. This sounds a bit like giving HUD an eminent domain authority; HUD could identify a rental property as “at risk" based on indefinite criteria and then the agency itself would employ the use of that property under a given municipalities public housing administration."

Yeah, this bill is about "predatory lending", SURE it is....

Jim C

June 22, 2009, 5:53pm (report abuse)

No I am not a plant for some organization supporting this legislation. I am a homeowner and also aware of many other homeowners who were damaged by predatory lending and loan steering. Brokers had their financial interest in mind and did little to give the future homeowner the best loan that they could obtain and at the best terms. People who could qualify for better terms should have been set into these loans instead of terms where the broker made profit but the homeowner could not afford.

I work in the electronics industry related to high technology and nothing to do with making loans.

I do realize that minimum standards need set for the worst possible loan marketed. Better lending terms will not be prohibited so free market does not work. A regulated market for worst possible lending terms is something that is no different than fire safety, building codes or other regulations set to protect Americans. Making things less likely to catch on flames or less likely to collapse.

Hozdaddy

June 23, 2009, 9:32am (report abuse)

it will put a crimp in the housing market recovery by limiting seller carry back financing to once every 3 years. With bad credit and no bank loans, buyers will not have active investors providing seller financing. Besides, seller financing is not a mortgage, it is defined as an installment sale by the IRS. This bill should not pass. If it does, don't expect a housing recovery.

Nolan Sweeney

June 23, 2009, 1:04pm (report abuse)

This Bill is an assault on property rights. I understand that predatory lending is an evil process, however the bill takes away property rights by limiting the ways you are able to sell your house. It gives more power to the banks who were the ones that caused this mess and hurts the responsible real estate investors and sellers that utilize owner/seller financing as a tool. This tool is so great because it allows the buyer to work directly with the seller to construct a deal that is a win-win for both parties. This is because the buyer is more in tune with the sellers wants and needs. Do you think banks are in tune with the sellers needs? NO! This bill will only further hurt the economy, give power to the wrong people, and further chip away our property rights. Wake up people! Fight for your rights! Make the people that were responsible pay for their mistakes but DO NOT allow the government to take away your inalienable rights!

reality

June 23, 2009, 9:45pm (report abuse)

Folks, give up on Jim C. Spend your valuable time convincing your congressmen to defeat this mess.

Jim C

June 23, 2009, 10:45pm (report abuse)

Bringing forth the bad elements that this legislation has is a good thing.

Many people who have been set into loans with very damaging terms. People who were told by brokers that they could refinance in six months and slipping in a pre-payment penalty 2 year rider have to be held criminally accountable.

Setting a minimal standard for lending related to affordability for long term contracts is important. If preventive measures were in place and enforced earlier we would not have such a financial collapse from bad lending.

Banks should not be put ahead of owner/buyer private dealings but should still be prevented from being able to dupe others as the nonprime lenders have which led to our world financial collapse.

As with fire prevention and structural safety in homes needs regulations in order to be observed, financial standards need to be observed to prevent lenders from giving sure to

Jim C

June 23, 2009, 10:48pm (report abuse)

Being given sure to fail loans and collecting moneys from the default insurance and also later the foreclosure. Then with their intention from deficiency judgments against those it duped.

AmishRakeFight

June 25, 2009, 4:38pm (report abuse)

Jim C ..... please set yourself on fire.. Immediately

hozdaddy

June 25, 2009, 9:37pm (report abuse)

this bill is another attempt to dumb down the population. How about reading what you're signing. If you don't understand it, maybe you shouldn't be involved or maybe you should spend $350 to have a lawyer explain it to you. For every predatory lender, there was a greedy home buyer who had no business getting a loan.

Jim C

June 26, 2009, 6:51am (report abuse)

Fire safety laws are pretty well enforced. Our problems relate to predatory lenders and how they setup loans to fail, make profits when the loans fail as designed and leave the victim in financial ruin. Also a problem is that these lenders freely lie in court about the victims communication with the lender and only set off the borrower further.

We need preventive measures to reduce the suicides prompted by hopelessness and the other destabilizing health related problems related to stress.

If you cannot lend fairly, do not loan with conditions which are obviously poor for world economies and displaced homeowners.

Amish is response to.

Jim C

June 26, 2009, 6:58am (report abuse)

Hozdaddy,

How about making affordable loans instead of toxic loans which are set up in complex lending schemes to those who are versed well in sports and everyday events and know little about financial predatory schemes.

Myself, I did not realize that a percentage up or down for interest with ARMS actually can be increased payments in 40% or more rises. Not too many people make 40% returns yearly or every half year to keep up with payment increases.

Of course banksters and MBA knew this ahead of time.

alm

July 10, 2009, 2:52pm (report abuse)

A third party told me that this bill also wanted to limit 1 owner finance sale every 3 years....can some guide to to where I can find this, thanks. al

PFSJ

July 13, 2009, 3:08pm (report abuse)

This bill is deceiving!

HR 1728, which has already passed in Congress, will effectively keep you from:

* Selling properties with owner-carryback or wrap-around mortgages

* Selling properties using land contracts or contracts for deed

* Selling properties using lease/option

* And, possibly, borrowing private money to buy properties

The bill as written basically REMOVES YOUR ABILITY TO SELL HOUSES and carry back payments.

It is a completely unacceptable infringement on private property rights. When I own a piece of property and find a ready, willing, and able purchaser, I should be able to control the sale of that property within the existing laws of my state, which already regulate the interest rate that I am able to charge and some of the terms of the sale. The government should not tell us that we need special licensing to sell our own properties

Read section 101(3)(e)

Please help stop this Bill! The motivation is good...the legislation is bad!!

susan0101

July 21, 2009, 3:48pm (report abuse)

This is not only bad for the mortgage industry but for those private parties who choose to house the people - landlords. This would cause limits on the number of homes that could have 'mortgages' and not private money loans, etc.

Does the government think that by limiting that they will still be able to have individuals provide economical housing for those who choose to rent and not own their own homes? If not these individuals - then who?? The government?

That really does hurt the free enterprise society.

Dale G

August 1, 2009, 9:59am (report abuse)

This is poorly written bill. They are in too much of hurry to do something that they are not thinking through the implications of what has been thrown together. It was poorly thought through legislation that caused this mess in the first place, "Fair Housing". We need to put the breaks on this and get it reworked. I note it has been in Senate committee for some time. I hope that means it is getting fixed. Otherwise, the real estate investment industry is doomed. Let us let the market correct itself and get the "King" out of our business.

Tom H

August 9, 2009, 2:03am (report abuse)

I have a house I need to sell. I have a second rental that I would like to do a rent to own deal for. If this passes, I am up the creek, since no one that looked at either house can qualify. Congress is full of knaves and idiots.

ESG

August 12, 2009, 1:34am (report abuse)

Can anyone point me to a link that shows the exact language in the Bill that references YSP? I have not been able to find where it is stated that lender compensation to the broker will be eliminated. Thanks!

Yammer in AZ

August 14, 2009, 11:53pm (report abuse)

Can someone help me understand this.... If HR #1728 (the bill that will do away with YSP paid to brokers) has passed the house and is on it's way to the senate. If it passes, that means we (brokers) will be limited to 1 point on all loans --- TOTAL. I will have to shut my doors, as will many/most brokers. Why don't I see anyone fighting this? Why aren't our wholesale lenders concerned about their customers (us) getting run out of business? Why aren't our NAMB and local trade org's fighting this? I believe everyone is in a state of disbelief. I called 5 of my lender reps today to ask what their companies were doing about this bill that will destroy their customers. None of them even knew what the status of the bill was, let alone if their companies had any opinion on the matter. Anyone seen Titanic lately?

Decue

September 5, 2009, 3:57pm (report abuse)

Yammer, I'm with you...it's beyond me why the brokers are not shouting about this. As for the wholesale lenders ... I'm sure the banks ( the few that still remain in wholesale) are for this and not against.. this way they can and will take advantage on their retail side. As for the NAMB...they are not worth the air they breath....it's sad but true.

fb47

September 21, 2009, 12:43pm (report abuse)

This bill will destroy all the small independent brokers. The main problem is that the banks themselves aren't being constrained in the same way as the brokers.

chuck

December 31, 2009, 11:30am (report abuse)

What about people not buying what they can't afford. People who got bad loans have no one to blame but them self’s. A home is the biggest purchase a person will make they should do so research and get educated about the process. If you have no money down you should not be purchasing a home. If its more then ¼ of your take home pay you should not be buying a home. Personal responsibility

seagate

February 9, 2010, 11:06am (report abuse)

Love "no one to blame but them self's" what a catch all statement. I guess the Madoff investors had no one to blame but them self’s. I guess the government had no responsibility of oversight in that case. Everyone should take the time and read the proposal and stop relying on others to interpret with their slant what the bill is actually proposing. About 5 postings back ESG (9/12/09) ask “Can anyone point me to a link that shows the exact language in the Bill that references YSP? I have not been able to find where it is stated that lender compensation to the broker will be eliminated.” But no one has answered his question. Stop the hype and read the bill. May be a number of you mortgage originators should be forced on of business?

appraiser

March 14, 2010, 10:56am (report abuse)

HVCC killed my appsr biz, after 6 yrs of hard work, hvcc came along and stole my book of biz. It didnt change the fact that mtg brokers can still find favorable appsrs who "get the value" and when I tried to report a lender, DRE told me to go to the appraiser unit. So after paying half the commission to the AMC, and not getting work as my values did not meet buyer needs, what good was HVCC? Now we have this HR whatever again taking money in fees (appsr pays $40 a year, AMC pays fee -which appraiser will pay) RE investors cant do Lease Option for people banks wont cover, many more people will get govt jobs as "overseers" or counselors(?), why doesn't the govt create real jobs and get out of overlord acts. Why not put our money to work on developing manufacturing jobs so Joe can afford to buy a home. Why not get rid of the stupid laws limiting our ability to manufacture which are not required in 3rd world countries and bring work home for the joes in US who want to work. Creat Jobs!

FRG

January 27, 2011, 11:04am (report abuse)

The voters not supporting this bill must be real estate agents.

fup

March 5, 2011, 1:58am (report abuse)

in process of reverse mort.in ny state

hvcc is holding up. when will this be resolved.

RSS Feeds for This Bill

Keep yourself updated on user contributions and debates about this bill! (Learn more about RSS.)