110 HCON 127 IH: Supporting home ownership and responsible U.S. House of Representatives 2007-04-24 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

IV 110th CONGRESS 1st Session H. CON. RES. 127 IN THE HOUSE OF REPRESENTATIVES April 24, 2007 Mr. Cummings submitted the following concurrent resolution; which was referred to the Committee on Financial Services CONCURRENT RESOLUTION Supporting home ownership and responsible lending.

Whereas home ownership is an essential part of realizing the American Dream; Whereas home ownership is a powerful economic stimulus, both for individual homeowners and for the national economy; Whereas home ownership also benefits neighborhoods by raising property values and by providing economic and social capital in previously distressed communities; Whereas in 2006, more than 75,000,000 Americans owned homes, and the home ownership rate was nearly 69 percent, a near record high; Whereas the home ownership rate for non-Hispanic whites in 2006 was 76 percent, while the rate for African American households was only 48.2 percent; Hispanic households were at 49.5 percent, and Asian, Native Americans, and Pacific Islanders were at 60 percent; Whereas this Nation experienced a housing boom from 2001 to 2006, due to historically low mortgage rates, rising home prices, and increased liquidity in the secondary mortgage market, all factors that led to the growth of the sub-prime mortgage industry; Whereas the sub-prime market has created opportunities for predatory lending in which unscrupulous lenders have hidden the true cost of sub-prime loans from unsophisticated borrowers; Whereas during the past few months, it has become increasingly clear that irresponsible sub-prime lending practices are contributing to a wave of foreclosures that are harming homeowners and rattling the housing markets; Whereas an estimated 1 in 5 sub-prime loans issued in 2005 and 2006 will go into default, costing 2,200,000 home owners their homes over the next several years; Whereas sub-prime mortgage loans are most prevalent in lower-income neighborhoods with high concentrations of minorities (in 2005, 53 percent of African American and 37.8 percent of Hispanic borrowers took out sub-prime loans), and more minorities are being steered into the higher-rate, sub-prime loan market than are white borrowers with the same qualifications; Whereas foreclosures are also costly from a legal and administrative standpoint, with the average foreclosure costing the borrower $7,200 in administrative charges; Whereas lenders do not typically benefit from taking over a delinquent owner’s property, losing as much as $50,000 per foreclosure; Whereas foreclosures can also be very costly for local governments because abandoned homes cost districts tax revenue; Whereas a recent study calculated that a single-family home foreclosure lowers the value of homes located within one-eighth of a mile (or one city block) by an average of 0.9 percent and even more so (1.4 percent) in low to moderate-income communities; and Whereas the time has come to raise awareness about the dangers of sub-prime loans and to protect homeowners from unscrupulous lending practices: Now, therefore, be it

That— (1)it is the sense of the Congress that legislation should be enacted that protects buyers who have been victims of unscrupulous mortgage brokers and lenders; and (2)specifically, such legislation should— (A)include an anti-predatory lending provision that bans unfair and deceptive practices; (B)require lenders to evaluate a borrower’s ability to pay over the life of the loan (at the fully indexed rate for the fully amortized amount); (C)establish Federal regulations regarding licensing, education, and experience requirements for mortgage brokers and loan officers in non-bank companies; (D)require that disclosures be written in plain language and prominently displayed in a manner that is visually clear and effectively communicates the intended information to the potential borrower; (E)reduce or eliminate prepayment penalties; (F)notify potential home buyers of lenders or brokers with high foreclosure rates; and (G)mandate pre-loan counseling.