The anti-predatory mortgage lending bill proposed by House Financial Services Committee Chair Barney Frank, H.R. 1728, contains many good provisions but several problematic provisions as well.
The National Community Reinvestment Coalition (NCRC) has identified some of the provisions that need to be strengthened : “safe harbor” for all FHA loans; limited liability for lenders and securitizers of mortgage loans; federal preemption of state laws that provide additional remedies for borrowers; and, no limits on yield spread premiums. Some of the strong provisions that must be preserved include: prohibition on prepayment penalties for subprime and other loans that do not qualify for safe harbor; ban on mandatory arbitration; tenant protections to remaining foreclosed properties until lease end or 90 days; and, requirement of on-site appraisers for high-cost loans.
Sen. Chris Dodd’s bill in the 110th Congress, S. 2452, included language more protective of consumers on these issues.
Woodstock Institute is working to support stronger consumer protections and accountability in federal anti- predatory lending and financial services oversight laws and regulations. To get involved with Illinois Community Investment Coalition members on these issues, contact Dory Rand.