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House Passes Mortgage Legislation

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The Associated Press

Published: November 16, 2007

WASHINGTON - With home foreclosures skyrocketing, the House on Thursday voted to crack down on mortgage lenders by forcing them to get licenses, making them responsible for discovering whether borrowers can really repay and fining them for steering people toward risky subprime loans.

The measures are designed to keep more people from sinking into the current mortgage crisis in which prospective homeowners with shaky credit got mortgages with low interest rates only to see the rates rise and bring monthly mortgages up to prices they cannot afford.

Included in the legislation are provisions that would:

•Ban lenders from making loans that borrowers don't have the ability to repay

•Prohibit lenders from steering homeowners into refinanced mortgages that don't provide any benefit and create fines of triple the broker fee and costs

•Make Wall Street banks that package mortgage securities into investments liable for violations of lending laws.

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