Congress is Cracking Down on Easy Credit Home Mortgages

Last week, the House of Representatives voted (For-291/Against-127) to tighten restrictions against easy-credit institutions (HR 3915) that have contributed to the weak housing market.   The bill requires states to license all mortgage providers, allows borrowers to sue institutions that knowingly repackage unsound loans into securites, and requires lenders to certify that borrowers have a reasonable ability to pay.   The bill also scales back prepayment penalties on loans, bans commissions to brokers for steering borrowers to mortages they can’t afford, and requires states to toughen lending rules or submit to the federal lending rules.   This bill has been sent to the Senate for consideration.

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