Miller/Watt/Frank Introduce Mortgage Reform Legislation
On Monday, October 22,
House Financial Services Committee Members Brad Miller (D-NC), Mel Watt (D-NC) and Chairman Barney Frank (D-MA) introduced H.R. 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007." The bill would reform mortgage practices in several areas: establish a federal duty of care; require licensing of all mortgage originators; prohibit steering; create an ability to repay standard; and would attach limited liability to secondary market securitizers.
On Wednesday, October 24,
House Financial Services Committee hearing entitled "Legislative Proposals on Reforming Mortgage Practices." The Committee called the hearing to examine H.R. 3915 and listen to perspectives on the bill from the federal financial regulators, consumer advocates and industry representatives. In his testimony, Mr. Pfotenhauer noted the thoughtful and deliberative work the Chairman and his staff have done in drafting the bill and expressed MBA concerns with some areas of the bill. MBA looks forward to continuing to work with the Chairman and Members of the Committee to improve this legislation.
Chairman-Elect David Kittle Participates in Chairman Frank Working Session
On Friday, October 26, MBA Chairman-Elect David Kittle, CMB, participated in a Working Session, hosted by House Financial Services Committee Chairman Barney Frank (D-MA) in Boston. Chairman Frank invited private sector, nonprofit and government organizations to discuss foreclosure prevention and renter protection efforts. The goal of the meeting was to improve coordination and discuss ideas on how to further help borrowers who are facing foreclosure. Some of the topics that were discussed included: "best practices" for working with borrowers; increased access to foreclosure prevention; voluntary private-sector foreclosure assistance funding; and expanding voluntary loan modifications.
House Judiciary Subcommittee to Hold Hearing on Bankruptcy Bill
This week, the House Judiciary Committee postponed a markup of H.R. 3609, the "Emergency Home Ownership and Mortgage Equity Protection Act of 2007," that would give bankruptcy judges the authority to modify or render loans unsecured during a bankruptcy. In response to concerns that this legislation will increase consumers' costs and decrease liquidity in the mortgage markets, the House Judiciary Subcommittee on Commercial and Administrative Law will hold a hearing on Tuesday, October 30, to examine the potential impact of allowing cramdowns on primary residences.
Servicing, Appraisal Bill Set to Move through House
Last week, House Financial Services Capital Markets, Insurance and Government Sponsored Enterprises Subcommittee Chairman Paul Kanjorski (D-PA) introduced H.R. 3837, the "Escrow, Appraisal and Mortgage Servicing Act of 2007," that would change a series of appraisal and servicing practices, particularly dealing with escrow payments and partial mortgage payments. While some sections are new, many of the provisions of this bill were part of H.R. 1295 in the previous Congress. We expect this legislation to move on a parallel track with Congressman Frank's predatory lending bill.
HOPE NOW Alliance Sends Letter to Financial Services Committee Chairman
On Thursday, October 25, the HOPE NOW Alliance, of which MBA is a member, sent a letter to House Financial Services Committee Chairman Barney Frank (D-MA) outlining efforts the HOPE NOW Alliance is doing to assist homeowners who are facing foreclosure. These include: expanding the capacity for counseling; outreach; improving servicer and counselor efforts; improving technology innovation and private sector funding. NeighborWorks America, which is part of the HOPE NOW Alliance, is actively providing borrowers with counseling services and the Homeownership Preservation Foundation, which has a national telephone counseling service (1-888-995-HOPE), continues to provide telephone counseling. In an attempt to help more homeowners, the Alliance has created six working groups that are meeting regularly to address key components of this effort.
MBA Responds to FHA Risk-Based Premium Proposal
On Monday, October 22, MBA submitted comments to the Department of Housing and Urban Development (HUD) in response to its planned implementation structure for FHA-insured single-family mortgages that would charge borrowers varying upfront premiums based on risk factors, such as credit scores, downpayment and source of downpayment. MBA raised particular concern around the speed with which FHA plans to implement the risk-based structure. MBA recommends that FHA delay implementation of the new premium structure under a time frame that will ensure lenders have sufficient time to implement it into their systems.
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