House, Senate Pass Mortgage Assistance Legislation
Legislation to curb abusive lending practices was passed by the House last week, a day after the Senate approved a separate bill to help struggling borrowers to refinance into more affordable loans.
H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act, would require mortgage lenders to retain at least a 5% stake on any non-qualified home loans sold off to investors. The measure was approved by a vote of 300 to 114 on May 7.
Prior to the House vote, NAHB sent a letter to every House member commending lawmakers for tackling this issue and providing several suggestions to modify and improve the bill.
Qualifying loans that would be exempt from this measure include 30-year fixed rate mortgages and other prime fixed-rate loans as well as mortgages backed by the government or Fannie Mae and Freddie Mac.
H.R. 1728 would also increase regulation of mortgage brokers, help renters avoid eviction when landlords default on their mortgages and provide new safeguards for consumers seeking a mortgage or to refinance their existing home.
On May 6, the Senate passed its own mortgage aid bill, S. 896, that would help revamp the Hope for Homeowners program aimed at helping struggling borrowers to refinance.
The legislation would also protect mortgage servicers from lawsuits when they modify loans and increase the Federal Deposit Insurance Corporation's line of credit from the U.S. Treasury to $500 billion through 2010 and $100 billion thereafter.
The Senate bill passed 91 to 5 just one week after an amendment that would allow judges to modify the terms of mortgages on a primary residence, known as a "cramdown," was stripped from the legislation.
The outlook for the House bill is uncertain as no companion bill has been introduced in the Senate. It is also unclear whether the House will take up and pass the Senate's housing bill.
NAHB continues to monitor the situation closely and will continue to work with lawmakers to improve both housing bills.
For more information on the House and Senate housing legislation, click here and type the respective bill numbers in the box in the upper center screen.
For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144.