WashingtonWatch.com - H.R. 3915, The Mortgage Reform and Anti-Predatory Lending Act of 2007

Comment by Jim C (August 20, 2008, 01:00:00)

Wed, 20 Aug 2008 00:00:00 EDT

Under regulation caused the problem. The gambling set and the sharking crowd need to have set expectations or they mislead borrowers, give inflated appraisals at sale, steer people toward bad loans instead of loans which they are qualified to obtain....

Comment by John Fedders (July 12, 2008, 01:00:00)

Sat, 12 Jul 2008 00:00:00 EDT

The only thing I like about the bill is its having addressed the gray area surrounding a renter who had the misfortune of occupying a residence that was subsequently foreclosed upon. In that case it preserves the role of real estate as a means of shelter, and preserves the bona fide renter's right to quiet enjoyment. That is the only equitable item I see in the bill. The rest appear to be obstacles, and/or a foul attempt at "reinventing" a square wheel. Addressing the real problem requires, in a nutshell, incentives for spending, as spending, or monetary circulation, and a robust economy go hand-in hand. A recession's bugle is the tightening of belts -- for politicians in panic, the blame and punishment put to the people is overregulation....

Comment by Edd (May 26, 2008, 01:00:00)

Mon, 26 May 2008 00:00:00 EDT

As an appraiser once subjected to tremendous pressure and abuse to bend to the will of loan originators and to the extent the bill reaches to curb that, it cannot be passed fast enough. I say once because I will not accept mortgage broker or appraisal management company assignments any longer. Neither in general respects the appraisers or the appraisal process....

Comment by Jim C (May 26, 2008, 01:00:00)

Mon, 26 May 2008 00:00:00 EDT

Interesting to hear the viewpoint from an appraiser on this issue. I hope this legislation gets passed so there will not be future problems caused by the conditions loose regulations propelled without proper regulations in place....

Revision by webmaster (February 6, 2008, 01:00:00)

Wed, 06 Feb 2008 00:00:00 EST

H.R. 3915 would amend the Truth in Lending Act to reform consumer mortgage practices and provide accountability for such practices, to establish licensing and registration requirements for residential mortgage originators, to provide certain minimum standards for consumer mortgage loans.

Detailed Summary

Mortgage Reform and Anti-Predatory Lending Act of 2007 - Title I: Residential Mortgage Loan Origination - Subtitle A: Licensing System for Residential Mortgage Loan Originators - Encourages the states, through the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, to establish a Nationwide Mortgage Licensing System and Registry (NMLSR) for the residential mortgage industry.

(Sec. 103) Includes among licensing and registration requirements that a loan origination business obtain: (1) a unique identifier; and (2) instruction on fraud, consumer protection, and fair lending issues.

Exempts certain loan processors and underwriters from the licensing or registration requirements.

Requires independent contractors who work as loan processors or underwriters to be either licensed or registered.

(Sec. 104) Sets forth state license and registration procedures.

(Sec. 105) Prescribes minimum standards for license renewal for state-licensed loan originators.

Requires the NMLSR to review and publish, but prohibits its from offering, directly or indirectly, pre-licensure educational courses for loan originators.

(Sec. 106) Requires federal banking agencies to develop and maintain jointly a system for registering employees of depository institutions or their subsidiaries as registered loan originators with the NMLSR.

Requires such agencies to: (1) include in the information furnished to the NMLSR the personal history and experience of such employees; and (2) authorize the NMLSR to obtain information related to any administrative, civil or criminal findings by any governmental jurisdiction.

(Sec. 107) Instructs the Secretary of Housing and Urban Development (HUD) to provide for a licensing and registration system governing loan originators operating in a state which: (1) does not have such a system in place within a prescribed time frame; or (2) does not participate in the NMLSR.

Instructs the Secretary to coordinate with the NMLSR to establish protocols for assigning a unique identifier to each loan originator licensed by HUD as a state-licensed loan originator that will facilitate electronic tracking and uniform identification of, and public access to, the employment history and the publicly adjudicated disciplinary and enforcement actions against loan originators.

(Sec. 108) Directs the Secretary to establish a back-up licensing and registry system any time the Secretary determines that the NMLSR is failing to meet the requirements and purposes of this Act for a comprehensive licensing, supervisory, and tracking system for loan originators.

(Sec. 109) Authorizes the federal banking agencies, HUD, and the NMLSR to charge fees to cover the costs of maintaining and providing access to NMLSR information to the extent such fees are not charged to consumers for access to such system and registry.

(Sec. 110) Instructs the Attorney General to provide access to all criminal history information to state regulators of loan originators if such checks are required for state licenses.

(Sec. 111) Provides for confidentiality of information.

(Sec. 112) Shields from liability regulatory entities performing in good faith information collection and dissemination under this Act.

(Sec. 113) Grants the Secretary enforcement authority to implement this Act, including assessment of civil monetary penalties.

Subtitle B: Residential Mortgage Loan Origination Standards - (Sec. 122) Amends the Truth in Lending Act to set forth a duty of care standard for residential mortgage loan originations.

(Sec. 123) Prohibits the payment of steering incentive compensation to mortgage originators based on, or varying with, the terms (other than principal amount) of any loan that is not a qualified mortgage.

Requires the federal banking agencies jointly to prescribe regulations to implement this Act.

(Sec. 124) Subjects mortgage originators to liability for monetary penalties for violations of this Act.

Title II: Minimum Standards for Mortgages - (Sec. 201) Sets forth minimum repayment standards for residential mortgage loans.

Requires creditors to determine, based on verified and documented information, that a consumer has a reasonable ability to repay the loan, according to its terms (taxes, insurance, and assessments), including the consumer's repayment ability if multiple loans are secured by the same dwelling.

Requires a creditor to take into consideration: (1) variable rate loans that defer repayment of any principal or interest (nonstandard loans); (2) interest-only loans; and (3) any balance increase that may accrue from any negative amortization.

(Sec. 202) Prohibits a creditor from extending credit for residential mortgage loans that involve refinancing of a prior residential mortgage loan unless the creditor determines that refinancing provides a net tangible benefit to the consumer.

Describes residential mortgage loans which do not provide a net tangible benefit to the consumer.

(Sec. 203) Sets forth a rebuttable presumption of the ability to repay.

(Sec. 204) Subjects a creditor to civil liability for violations of this Act, including rescission of a residential mortgage loan and certain additional costs, including a reasonable attorney's fee of the obligor.

Subjects an assignee or securitizer of such a loan, acting in good faith, to liability for a creditor's violations, but only for rescission of the loan, plus related costs and attorney fees. Exempts an assignee or securitizer from such liability if it provides a cure, and meets other specified requirements.

Permits a consumer to maintain a civil action against an assignee to cure, but not rescind, a residential mortgage loan, if a creditor or assignee of a loan has: (1) ceased to exist as a matter of law; (2) filed for bankruptcy protection; or (3) had receivers or liquidating agents appointed.

Subjects good faith assignees and securitizers of such a creditor to the same liability for a creditor's violations, unless they provide a cure for such violations or they meet specified conditions.

Prohibits class action suits against assignees and securitizers.

Excludes from such assignee and securitizer liability any residential mortgage loans aggregated in a pool of assets held to issue or sell instruments representing interests in such pools, including through a securitization vehicle.

(Sec. 205) Authorizes a consumer who has the right to rescind with respect to a residential mortgage loan against the creditor (or any assignee or securitizer) to assert such right as a defense or counterclaim to foreclosure against the mortgage loan holder (or its agent).

(Sec. 206) Proscribes certain practices, including: (1) certain prepayment penalties; (2) single premium credit insurance; (3) mandatory arbitration (except for reverse mortgages); (4) mortgage loan provisions that waive statutory cause of action by the consumer ; (5) negative amortization mortgages.

Reserves the right of a securitizer to retain access to any residential mortgage loan in any document establishing a pool of assets including such loan in order to provide for and obtain a remedy for the obligor under such loan.

Sets forth the effect of foreclosure on a preexisting lease.

(Sec. 208) Declares that: (1) this Act supersedes any state law that provides additional remedies against any assignee, securitizer, or securitization vehicle; and (2) the remedies in this Act constitute the sole remedies against any assignee, securitizer, or securitization vehicle for specified violations.

(Sec. 210) Doubles civil money penalties for certain violations.

Extends to three years the statute of limitations for certain violations.

(Sec. 211) Exempts a creditor, assignee, or securitizer from liability and rescission in the case of borrower fraud or deception by an obligor.

(Sec. 212) Requires the creditor or servicer of a loan to notify the consumer with a written explanation, including alternative moves, during the one-month period that ends six months before the interest rate in effect during the introductory period of a hybrid adjustable rate mortgage adjusts or resets to a variable interest rate.

(Sec. 213) Requires additional information disclosures for: (1) variable payments or interest rates; (2) escrow or impound accounts; (3) aggregate settlement charges; (4) aggregate mortgage origination loan fees; (5) payment schedules; and (6) updating of annual percentage rates of interest (APRs).

(Sec. 214) Requires specified disclosures in monthly statements for residential mortgage loans, including: (1) the amount of the principal obligation under the mortgage; (2) the current interest rate in effect for the loan; and (3) the date on which the interest rate may next reset or adjust.

(Sec. 215) Authorizes appropriations to the Attorney General for FY2008-FY2012 for prosecution of mortgage fraud.

(Sec. 217) Directs the Comptroller General to study and report to Congress on the effects of this Act upon the availability and affordability of credit for homebuyers and mortgage lending.

Title III: High-Cost Mortgages - (Sec. 301) Redefines high cost-mortgages with respect to: (1) introductory rates; (2) adjustment of percentage points; (3) points and fees; (4) high-cost mortgage lenders; and (5) bona fide discount points.

(Sec. 302) Revises requirements governing prepayment penalties.

Prohibits: (1) balloon payments for high-cost mortgages; (2) lending without due regard to debtor's repayment ability; (3) creditor recommendation to debtor to default; (4) certain late fees in connection with a high-cost mortgage; (5) debt acceleration at creditor's sole discretion; (6) creditor financing of certain financing points and fees; (7) evasions, structuring of transactions, and reciprocal arrangements; and (8) certain creditor-imposed fees for modification, deferral, and payoff statements.

(Sec. 303) Prohibits a creditor from extending credit to a consumer under a high-cost mortgage without first receiving certification from a counselor approved by either HUD or a state housing finance authority that the consumer has received counseling on the advisability of the mortgage.

Prohibits a creditor from knowingly or intentionally engaging in the unfair act or practice of flipping in connection with a high-cost mortgage (defined as a loan or extension of credit in the form a high-cost mortgage to a consumer which refinances an existing mortgage when the new loan or extension of credit does not have reasonable, tangible net benefit to the consumer considering all circumstances).

(Sec. 305) Directs the Board of Governors of the Federal Reserve System (Federal Reserve Board) to promulgate regulations implementing this Act.

Authorizes the Board to prescribe regulations requiring or encouraging creditors to provide consumer mortgage education to prospective customers, or direct such customers to qualified consumer mortgage education or counseling programs.

Prohibits any construction of a Board requirement as affecting or superseding any state law requirement regarding consumer mortgage counseling or education.

Title IV: Office of Housing Counseling - Expand and Preserve Home Ownership Through Counseling Act - (Sec. 402) Establishes within HUD the Office of Housing Counseling, headed by the Director of Housing Counseling.

Requires the Secretary to appoint an advisory committee.

(Sec. 403) Sets forth counseling procedures.

Instructs the Director to develop and conduct national public service multimedia campaigns designed to make persons facing mortgage foreclosure, persons considering a subprime mortgage loan to purchase a home, elderly persons, persons who face language barriers, low-income persons, and other potentially vulnerable consumers aware that it is advisable, before seeking or maintaining a residential mortgage loan, to obtain home ownership counseling from an unbiased and reliable sources, and that such home ownership counseling is available from HUD.

Requires HUD to provide advice and technical assistance to states, local governmental entities, and nonprofit organizations regarding the establishment and operation of consumer education programs (particularly for those most vulnerable with respect to residential mortgage loans, mortgage refinancing, home equity loans, and home repair loans).

(Sec. 404) Amends the Housing and Urban Development Act of 1968 to require the Secretary to make financial assistance available to states, local governments, and nonprofit organizations providing home ownership or rental counseling.

Authorizes appropriations for FY2008-FY2011.

(Sec. 405) Revises requirements for use of HUD-certified counselors under HUD programs.

(Sec. 406) Instructs the Secretary to study and report to Congress on the root causes of default and foreclosure of home loans, including an examination of the role of escrow accounts in helping prime and nonprime borrowers to avoid defaults and foreclosures.

(Sec. 408) Amends the Real Estate Settlement Procedures Act of 1974 (RESPA) to require HUD to prepare, periodically, in various languages and cultural styles, a booklet to help consumers applying for federally related mortgage loans to understand the nature and costs of real estate settlement services.

Title V: Mortgage Disclosures Under Real Estate Settlement Procedures Act of 1974 - (Sec. 501) Amends RESPA to set forth a universal mortgage disclosure requirement for good faith estimates of settlement services costs.

Requires the Secretary to prescribe a standard form for such disclosure, to be used without variation in all transactions in the United States that involve federally related mortgage loans.

Title VI: Mortgage Servicing - (Sec. 601) Requires a creditor, in connection with the formation or consummation of a consumer credit transaction secured by a first lien on the consumer's principal dwelling (other than a reverse mortgage or a credit card transaction), to establish in a federally insured depository institution, at the time of consummation, an escrow or impound account for the payment of taxes and hazard insurance, and, if applicable, flood insurance, mortgage insurance, ground rents, and other required periodic payments or premiums.

(Sec. 602) Requires the creditor or servicer of a mortgage loan to advise a consumer in writing of the consumer's responsibilities and the implications for the consumer in the absence of an escrow or impound account, if one is not established or the consumer chooses to close one.

(Sec. 603) Amends RESPA to prohibit certain practices by federally related mortgage loan servicers, including: (1) obtaining force-placed hazard insurance unless it is reasonable to believe the borrower has failed to comply with the loan contract's requirements to maintain property insurance; (2) charging fees for responding to valid qualified written requests; (3) failing to respond timely to borrower's requests to correct errors relating to standard servicer duties; and (4) failing to respond within 10 business days to a borrower's request to provide relevant contact information about the owner assignee of the loan.

Prescribes requirements for a federally related mortgage loan servicer to meet when obtaining force-placed insurance (hazard insurance coverage obtained by a servicer when the borrower has failed to maintain or renew hazard insurance on a property as required under the mortage terms).

Requires prompt crediting of a borrower's payments on the business day received by a home loan lender or servicer.

Increases the maximum additional damages for RESPA violations: (1) from $1,000 to $2,000 for an individual action; and (2) from $500,000 to $1 million for a class action.

Reduces the maximum length of time for a loan servicer to respond to borrower inquiries: (1) from 20 to 10 days to acknowledge receipt of an inquiry; and (2) from 60 to 30 days to take certain actions in response to an inquiry.

Requires: (1) a creditor or servicer to send a payoff balance within seven business days of receipt of a borrower's written request; and (2) prompt refund of escrow accounts upon payoff.

(Sec. 604) Requires the Secretary to study and report to Congress on: (1) mortgage servicing practices and their potential for fraud and abuse; and (2) mortgage servicing improvements.

(Sec. 605) Amends the Truth in Lending Act, in any case of a consumer credit transaction secured by a first mortgage or lien on the consumer's principal dwelling (other than a reverse mortgage or a credit card transaction), for which an account is set up for property taxes, hazard insurance, and other periodic payments, to require the repayment analysis to account for escrow payments and the taxable assessed value of the real property securing the transaction.

Title VII: Appraisal Activities - (Sec. 701) Amends the Truth in Lending Act to prohibit a creditor from extending credit in the form of a mortgage to any consumer without first obtaining a written property appraisal prepared, in accordance with the requirements of this Act, by a qualified appraiser after conducting a physical property visit of the interior of the mortgaged property.

Requires the creditor to provide one copy of each such appraisal, without charge, to the consumer at least three days before the transaction closing date. Subjects violations to a monetary penalty.

(Sec. 702) Proscribes certain unfair and deceptive practices in connection with a consumer credit transaction secured by the consumer's principal dwelling, including: (1) mischaracterizing, or suborning a mischaracterization of, the property's appraised value; (2) seeking to influence an appraiser or otherwise to encourage a targeted value in order to facilitate the making or pricing of the transaction; and (3) failing to timely compensate an appraiser for a completed appraisal, regardless of whether the transaction closes.

Requires the federal banking agencies and the Federal Trade Commission (FTC) to jointly prescribe regulations defining with specificity unfair or deceptive practices in the provision of mortgage lending services.

(Sec. 703) Creates the Appraisal Subcommittee of the Financial Institutions Examination Council to protect the consumer from improper appraisal practices and the predations of unlicensed appraisers.

Authorizes the Appraisal Subcommittee to prescribe regulations.

Requires each state with an appraiser certifying and licensing agency meeting certain criteria to report to the Appraisal Subcommittee's national registry on sanctions, disciplinary actions, license and certification revocations, and license and certification suspensions.

Increases from $25 to $40 the annual registry fees for persons performing appraisals in federally related transactions. Authorizes the Appraisal Subcommittee to adjust such fees within certain limits.

Directs the Appraisal Subcommittee to: (1) make grants to state appraiser regulatory agencies to help defray costs of enforcement activities; and (2) report to state appraiser certifying and licensing agencies when a license or certification is surrendered, revoked, or suspended.

Requires the Appraisal Subcommittee to monitor state appraiser certifying and licencing agencies for compliance with certain requirements.

Prohibits specified interested parties in a real estate transaction from engaging in certain practices to influence improperly the development, reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan.

Subjects violators to civil penalties.

(Sec. 704) Directs the Comptroller General to study and report to Congress on possible improvements in the appraisal process, including the consistency and the effectiveness of improvements in state compliance efforts and programs in accordance with title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).

(Sec. 705) Requires that, in any case in which an appraisal is performed in connection with an extension of credit secured by an interest in real property, the mortgage originator make available to the credit applicant a copy of all appraisal valuation reports upon completion, but no later than three business days before the transaction closing date.

Status of the Legislation

Latest Major Action: 12/3/2007: 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

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Points Against

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Revision by webmaster (January 11, 2008, 01:00:00)

Fri, 11 Jan 2008 00:00:00 EST

Detailed Summary

Mortgage Reform and Anti-Predatory Lending Act of 2007 -- Amends the Truth in Lending Act to set forth a duty of care standard for residential mortgage loan originations.

Prohibits steering incentives to mortgage originators, including incentive compensation and any yield spread premium based on, or varying with, the terms of a residential mortgage loan.

Directs the Secretary of Housing and Urban Development and other specified federal banking regulatory agencies to prescribe jointly regulations to prohibit mortgage originators from steering any consumer to a residential mortgage loan that is not in the consumer's interest (loans with predatory characteristics).

Sets forth licensing and registration requirements for mortgage originators.

Sets forth minimum repayment standards for residential mortgage loans. Requires creditors to determine, based on verified and documented information, that a consumer has a reasonable ability to repay the loan, according to its terms, and all applicable taxes, insurance, and assessments.

Prohibits creditors from extending credit for residential mortgage loans that involve refinancing of a prior residential mortgage loan unless the creditor determines that refinancing provides a net tangible benefit to the consumer.

Subjects assignees and securitizers to liability for certain violations in connection with residential mortgage loans.

Sets forth defenses to foreclosure.

Proscribes certain practices, including: (1) certain prepayment penalties; (2) single premium credit insurance; (3) mandatory use of arbitration; and (4) negative amortization mortgages.

Redefines high-cost mortgages. Prohibits balloon payments for such mortgages.

Revises requirements governing prepayment penalties. Prohibits lending without due regard to repayment ability.

Prohibits certain creditor practices with respect to high-cost mortgages, including: (1) recommending default on an existing loan or other debt before and in connection with closing of a high-cost mortgage that refinances all or any portion of such existing loan or debt; (2) imposing late fees except according to specified requirements; (3) exercising sole discretion to accelerate indebtedness; (4) financing points and fees; (4) structuring certain transactions and reciprocal arrangements to evade the requirements and prohibitions of this Act; and (5) charging certain modification or deferral fees, and fees for notification of payoff information.

Requires pre-loan counseling.

Status of the Legislation

Latest Major Action: 12/3/2007: 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

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Points Against

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Revision by webmaster (January 11, 2008, 01:00:00)

Fri, 11 Jan 2008 00:00:00 EST

Detailed Summary

(Sec. 103) Sets forth licensing and registration requirements for a loan origination business, including one for an originator to obtain a unique identifier.

Exempts certain loan processors and underwriters from the licensing or registration requirements.

Requires independent contractors who work as loan processors or underwriters to be either licensed or registered.

(Sec. 104) Sets forth state license and registration procedures.

(Sec. 105) Prescribes minimum standards for license renewal for state-licensed loan originators.

Instructs the Secretary of HUD to coordinate with the NMLSR to establish protocols for assigning a unique identifier to each loan originator licensed by HUD as a state-licensed loan originator that will facilitate electronic tracking and uniform identification of, and public access to, the employment history and the publicly adjudicated disciplinary and enforcement actions against loan originators.

(Sec. 110) Instructs the Attorney General to provide access to all criminal history information to state regulators of loan originators if such checks are required for state licenses.

(Sec. 111) Provides for confidentiality of information.

(Sec. 112) Shields from liability regulatory entities performing in good faith information collection and dissemination under this Act.

(Sec. 113) Grants the Secretary of HUD enforcement authority to implement this Act, including assessment of civil monetary penalties.

Subtitle B: Residential Mortgage Loan Origination Standards - (Sec. 122) Amends the Truth in Lending Act to set forth a duty of care standard for residential mortgage loan originations.

Requires the federal banking agencies jointly to prescribe regulations to implement this Act.

(Sec. 124) Subjects mortgage originators to liability for monetary penalties for violations of this Act.

Title II: Minimum Standards for Mortgages - (Sec. 201) Sets forth minimum repayment standards for residential mortgage loans.

(Sec. 202) Prohibits creditors from extending credit for residential mortgage loans that involve refinancing of a prior residential mortgage loan unless the creditor determines that refinancing provides a net tangible benefit to the consumer.

Describes residential mortgage loans which do not provide a net tangible benefit to the consumer.

(Sec. 203) Sets forth a rebuttable presumption of the ability to repay.

(Sec. 204) Subjects a creditor to civil liability for violation of this Act, including rescission of a residential mortgage loan and certain additional costs, including a reasonable attorney's fee of the obligor.

Subjects good faith assignees and securitizers of such a creditor to the same liability for a creditor's violations, unless they provide a cure for such violations or they meet specified conditions.

Prohibits class action suits against assignees and securitizers.

(Sec. 205) Sets forth defenses to foreclosure.

Sets forth the effect of foreclosure on a preexisting lease.

(Sec. 210) Doubles civil money penalties for certain violations.

Extends to three years the statute of limitations for certain violations.

(Sec. 211) Requires additional information disclosures for: (1) variable payments or interest rates; (2) escrow or impound accounts; (3) aggregate settlement charges; (4) aggregate mortgage origination loan fees; (5) payment schedules; and (6) updating of annual percentage rates of interest (APRs).

(Sec. 212) Authorizes appropriations to the Attorney General for FY2008-FY2012 for prosecution of mortgage fraud.

Title III: High-Cost Mortgages - (Sec. 301) Redefines high cost-mortgages with respect to: (1) introductory rates; (2) adjustment of percentage points; (3) points and fees; (4) high-cost mortgage lenders; and (5) bona fide discount points.

(Sec. 302) Revises requirements governing prepayment penalties.

(Sec. 305) Directs the Board of Governors of the Federal Reserve System (Federal Reserve Board) to promulgate regulations implementing this Act.

Prohibits any construction of a Board requirement as affecting or superseding any state law requirement regarding consumer mortgage counseling or education.

Title IV: Office of Housing Counseling - Expand and Preserve Home Ownership Through Counseling Act - (Sec. 402) Establishes within HUD the Office of Housing Counseling, headed by the Director of Housing Counseling.

Requires the Secretary of HUD to appoint an advisory committee.

(Sec. 403) Sets forth counseling procedures.

Requires the Secretary of HUD to provide advice and technical assistance to states, local governmental entities, and nonprofit organizations regarding the establishment and operation of consumer education programs (particularly for those most vulnerable with respect to residential mortgage loans, mortgage refinancing, home equity loans, and home repair loans).

(Sec. 404) Amends the Housing and Urban Development Act of 1968 to require the Secretary of HUD to make financial assistance available to states, local governments, and nonprofit organizations providing home ownership or rental counseling.

Authorizes appropriations for FY2008-FY2011.

(Sec. 405) Revises requirements for use of HUD-certified counselors under HUD programs.

(Sec. 406) Instructs the the Secretary of HUD to study and report to Congress on the root causes of default and foreclosure of home loans, including an examination of the role of escrow accounts in helping prime and nonprime borrowers to avoid defaults and foreclosures.

(Sec. 408) Amends the Real Estate Settlement Procedures Act of 1974 (RESPA) to require the Secretary of HUD to prepare, periodically, in various languages and cultural styles, a booklet to help consumers applying for federally related mortgage loans to understand the nature and costs of real estate settlement services.

Title V: Mortgage Disclosures Under Real Estate Settlement Procedures Act of 1974 - (Sec. 501) Amends the RESPA to set forth a universal mortgage disclosure requirement for good faith estimates of settlement services costs.

Requires the Secretary of HUD to prescribe a standard form for such disclosure, to be used without variation in all transactions in the United States that involve federally related mortgage loans.

Status of the Legislation

Latest Major Action: 12/3/2007: 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

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Comment by steve in san diego (December 24, 2007, 01:00:00)

Mon, 24 Dec 2007 00:00:00 EST

As a self-employed borrower (no relation to mortgage industry) I have used stated income loans for 20 years without missing a payment. Obviously these weren't a problem since lenders kept offering them. The abuse is that they were recently offered to subprime, non self-employed, and no down payment. This bill is devasting to the self-employed! And there are a lot of us, so it'll have real effects on the whole real market....

Comment by Jim (December 17, 2007, 01:00:00)

Mon, 17 Dec 2007 00:00:00 EST

This legislation should curb some of the abusive loans. It is coming after all of the troubles already have happened already and may not do any good. Any legislation which helps to prevent people from being steered to higher cost loans is good. The industry has already demonstrated that without regulation the consumer is not fully represented in the deal making....

Comment by Anthony (December 16, 2007, 01:00:00)

Sun, 16 Dec 2007 00:00:00 EST

H.R. 3915 Bill many flaws. Blaming originators and mortgage brokers does not solve the problem with the housing crunch. Why do people have a hard time making their house payments? The banking system came up with the idea of amortizing house loans. When you borrow $300,000 you have to pay back nearly $600,000 back on top of the $300,000 that you borrowed. That is reckless profiteering of banks and bankers. The local tax entities jacks up property taxes and the insurance carrier makes a profit. At the same time Corporation scale down (fire people that need to pay their mortgages) and outsource the production of their goods to other countries. We need to evaluate what constitutes a house payment and the method for bankers and banks charge. They need to disclose what kind of profits they make on people wouldn't you agree....

Comment by Anthony (December 16, 2007, 01:00:00)

Sun, 16 Dec 2007 00:00:00 EST

Further comments is that we need to seriously look at how banks charge so much money for a home loan. Banks do not disclose anything and can hide any YSP by naming it something else. Loans are designed by the lawyers hired by both banks and wall street. They had a major role in this housing collapse and somehow originators and mortgage brokers become the escape goats. Let us be honest as to what the real cause it. It is the hugh profits generated by amortization loan system designed by the banking system and sanctioned by our legislators....

Status as of December 3, 2007

Mon, 03 Dec 2007 00:00:00 EST

12/3/2007: Referred to Senate committee. Status: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Comment by Drew (December 1, 2007, 01:00:00)

Sat, 01 Dec 2007 00:00:00 EST

The bottom line is that lenders are not doing a thing to help people out, they are getting greedy and they want it all for themselves. The only problem is most won't qualify for loans through regular banks because of their strict guidelines which will decrease the amount of overall lending power available throughout the entire country. Doing so will cause the obvious affect...a real estate market crash!!!...

Comment by Paul in AZ (November 17, 2007, 01:00:00)

Sat, 17 Nov 2007 00:00:00 EST

This is a shout out to all the mortgage brokers that have contributed to this string....GOOD JOB!! First, the response to congress did save the YSP...which is good for the consumer. Secondly, I'd not seen this site before, there has been excellent analysis and commentary in this string. Shows that there are people in our business that are smart, concerned and dedicated. Most of the 'sleeze bags' that WERE....and a few are still in our business, couldn't even read this yet alone contribute to it. We will survive! Keep up the fight, the Bill isn't law yet, we can still make important changes. Call, write, fax, email your congressment. Stay involved in NAMB PACs..... Semper Fi...

Revision by webmaster (November 16, 2007, 01:00:00)

Fri, 16 Nov 2007 00:00:00 EST

Detailed Summary

Mortgage Reform and Anti-Predatory Lending Act of 2007 -- Amends the Truth in Lending Act to set forth a duty of care standard for residential mortgage loan originations.

Prohibits steering incentives to mortgage originators, including incentive compensation and any yield spread premium based on, or varying with, the terms of a residential mortgage loan.

Sets forth licensing and registration requirements for mortgage originators.

Subjects assignees and securitizers to liability for certain violations in connection with residential mortgage loans.

Sets forth defenses to foreclosure.

Proscribes certain practices, including: (1) certain prepayment penalties; (2) single premium credit insurance; (3) mandatory use of arbitration; and (4) negative amortization mortgages.

Redefines high-cost mortgages. Prohibits balloon payments for such mortgages.

Revises requirements governing prepayment penalties. Prohibits lending without due regard to repayment ability.

Requires pre-loan counseling.

Status of the Legislation

Latest Major Action: 11/15/2007: Passed/agreed to in House. Status: On passage Passed by the Yeas and Nays: 291 - 127 (Roll no. 1118).

Points in Favor

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Points Against

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Comment by Jon (November 15, 2007, 01:00:00)

Thu, 15 Nov 2007 00:00:00 EST

The only thing that is apparent to me through this whole mess of a proposal is that our elected officials don't have a clue as to how this industry works. Insurance agents receive remittance on policy payments, stockbrokers get paid commission on trades, financial planners get paid commissions based on the class of the funds, etc... I originate 95% of my business through conforming loans and government loans. I do not do much sub-prime. Never have in the 15+ yrs in the biz. However, legislating our business any more than it already is will not solve a thing. Many of the states have already pre-empted the federal laws with tougher standards. Writing new federal standards, especially ones that make absolutely no sense at all when taking as a whole (there are parts I agree with), is certainly not the answer. Wake up congress! Do the right thing for a change. Let the market, the industry, and the states handle this one....

Comment by Harold (November 15, 2007, 01:00:00)

Thu, 15 Nov 2007 00:00:00 EST

This is a terrible bill that would give banks complete control of the mortgage industry. There is value in using Mortgage Brokers. Currently, consumers win by having mortgage brokers because, by vitue of competition, brokers offer the lowest rates possible. Without this, banks could and would offer increased interest rates and, by the way, banks do not have to disclose yield spread premiums which brokers do. My state already requires licensing and registration of all mortgage brokers. If this bill passes, banks win and consumers lose....

Revision by webmaster (November 15, 2007, 01:00:00)

Thu, 15 Nov 2007 00:00:00 EST

Detailed Summary

Mortgage Reform and Anti-Predatory Lending Act of 2007 -- Amends the Truth in Lending Act to set forth a duty of care standard for residential mortgage loan originations.

Prohibits steering incentives to mortgage originators, including incentive compensation and any yield spread premium based on, or varying with, the terms of a residential mortgage loan.

Sets forth licensing and registration requirements for mortgage originators.

Subjects assignees and securitizers to liability for certain violations in connection with residential mortgage loans.

Sets forth defenses to foreclosure.

Proscribes certain practices, including: (1) certain prepayment penalties; (2) single premium credit insurance; (3) mandatory use of arbitration; and (4) negative amortization mortgages.

Redefines high-cost mortgages. Prohibits balloon payments for such mortgages.

Revises requirements governing prepayment penalties. Prohibits lending without due regard to repayment ability.

Requires pre-loan counseling.

Status of the Legislation

Latest Major Action: 11/14/2007: Rules Committee Resolution H. Res. 825 Reported to House. Rule provides for consideration of H.R. 3915 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. Measure will be considered read. Specified amendments are in order. It shall be in order to consider as an original bill for the purpose of amendment under the five-minute rule the amendment in the nature of a substitute recommended by the Committee on Financial Services now printed in the bill.

Points in Favor

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Points Against

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Status as of November 15, 2007

Thu, 15 Nov 2007 00:00:00 EST

11/15/2007: Passed/agreed to in House. Status: On passage Passed by the Yeas and Nays: 291 - 127 (Roll no. 1118).

Comment by EJ (November 14, 2007, 01:00:00)

Wed, 14 Nov 2007 00:00:00 EST

RTR, if you standardized a fee paid for loan amount then I guess you would have a single rate set for the market. Where is the free enterprise and competition to come from then? Rates would be set for the big banks to make the money then. Jim, obviously as you are aware these types of things are cyclical in nature. As the market continues to tighten up and foreclosures eventually drop then you will see banks open up to more risk to keep feeding the cash cow of the housing industry. Somewhere in the middle is the right mix, but as the pendelum swings we always go to far in both directions....

Status as of November 14, 2007

Wed, 14 Nov 2007 00:00:00 EST

11/14/2007: Rules Committee Resolution H. Res. 825 Reported to House. Rule provides for consideration of H.R. 3915 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. Measure will be considered read. Specified amendments are in order. It shall be in order to consider as an original bill for the purpose of amendment under the five-minute rule the amendment in the nature of a substitute recommended by the Committee on Financial Services now printed in the bill.

Comment by DAVID C (November 13, 2007, 01:00:00)

Tue, 13 Nov 2007 00:00:00 EST

When the option arms, stated programs, reduced doc, NINA,etc..programs came out, I think they were good for what they were. Instead of people relying only on a bank for what few programs they offer, they have been opened up to a whole other world of possibilities. Like every thing else in life you have a few bad apples. There are some bad brokers that are out there. Brokers unlike banks do have more to choose from for their borrowers. Has anyone looked at the over all mortgages that have been done that have been very successful? No, in this economy like so many others the Media gets on it and Bam we have to find a scapegoat. NO one ever says anything about the brokers who got them out of financial straights, or the broker that got them in a home with a house payment less than what they were paying rent for. It is every one’s dream to own their own home. Mortgage brokers can and have made this a reality for so many people that other wise would not have had a chance....

Comment by Tina C (November 13, 2007, 01:00:00)

Tue, 13 Nov 2007 00:00:00 EST

The borrower that decides not to pay his house payment for whatever reason,divorce,loss of job,sickness in family,etc... and then his home goes into foreclosure, why is this the brokers fault? Everyone wants to blame someone for their mistakes. I think it's human nature to do so. Doesn't make it right. The broker that takes full advantage of someone to make a big pay isn't right either, but not all brokers are like this just like not all home owners allow themselves to get in a fix where they lose their homes....

Comment by Jim (November 13, 2007, 01:00:00)

Tue, 13 Nov 2007 00:00:00 EST

Nobody just decides to not pay for their house. Some of the loans customers were steered to have terms which are not sustainable once the introductory period expires. The other elements related to job loss, divorce, family medical expenses are better addressed by HR 3609. The other issues include me. The bad loans only add to the problem and disadvantage people in declining income or increased expenses situations. Also, I agree with the previous comment which refers to bankers still able to get point spreads while brokers are unable to. These portions of the legislation should apply to bankers as well as brokers regarding incentives to steer customers to worse term loans based upon YSP....

Comment by EJ (November 13, 2007, 01:00:00)

Tue, 13 Nov 2007 00:00:00 EST

This whole issue of steering to has already been cured by the markets. Most of these products no longer exist! Let the market fix what is wrong with the market. The use of YSP to lower closing costs has enabled me to help many folks get into homes. Eliminating all forms of YSP would be wrong....