National Commentary

Congressman Moran’s News Commentary

The U.S. home foreclosure rate has hit the highest level in 25 years.  Families across the country are losing their homes. In many cases because falling home prices have made their adjustable rate mortgages no longer affordable.

In order to prevent this type of mortgage crisis from ever happening again, this week, the House will vote on the Mortgage Reform and Anti-Predatory Lending Act (H.R. 1728), legislation aimed at curbing abusive and predatory lending.

The bill would outlaw many of the egregious industry practices that marked the subprime lending boom. These include:

Prevent Predatory and Abusive Lending Practices: Statistics show that many homeowners in the current mortgage crisis received more expensive loans than they were qualified for. This is the result of a predatory practice known as “steering,” in which a broker or bank loan officer is compensated for directing applicants toward more costly mortgages.  H.R. 1728 would ban practices that reward originators who “steer” borrowers to these more expensive mortgages.

Hold Creditors Responsible for the Loans they Originate: The bill would require new federal rules to be written to require creditors to retain an economic interest in at least 5 percent of the credit risk of each loan that the creditor transfers, sells, or conveys to a third party.

Protect Tenants who Rent Homes that go into Foreclosure: Renters are also when the homes they rent go into foreclosure.   This legislation will provide protections for renters so that they receive proper notification and are given time to relocate before the home they rent is foreclosed.

Mortgage lending reform must become law so that the current mortgage crisis is never repeated. If Congress had enacted this measure years ago, the subprime mortgage crisis could have been prevented altogether.

I look forward to this bill becoming law, finally eliminating the worst lending practices that got us into the mess we are in today.