[Congressional Record Volume 155, Number 70 (Thursday, May 7, 2009)]
[Extensions of Remarks]
[Page E1083]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

                                 ______
                                 

                               speech of

                          HON. STENY H. HOYER

                              of maryland

                    in the house of representatives

                         Wednesday, May 6, 2009

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 1728) to 
     amend the Truth in Lending Act to reform consumer mortgage 
     practices and provide accountability for such practices, to 
     provide certain minimum standards, for consumer mortgage, 
     loans, and for other purposes:

  Mr. HOYER. Mr. Chair, it is well-known by now that our economic 
crisis began as a foreclosure crisis. It began with homeowners across 
America signing up for mortgages they could not afford. And even though 
few of us knew it at the time, much of our financial system was riding 
on their ability to pay those mortgages off. When it became clear that 
many of them could not, the economic chain reaction affected every 
community in America. For a family, a foreclosure is traumatic enough--
but we have also learned from this crisis that foreclosures can have 
wide public consequences, as well.
  Of those who applied for mortgages they could not possibly pay back, 
some were simply irresponsible. But many others were hardworking, 
responsible homeowners who fell victim to predatory lending. 
Unfortunately, incentives in our financial system made that predatory 
lending possible: unscrupulous mortgage brokers were not required to 
provide sufficient information to homeowners, and those who then sold 
the mortgages had little reason to see that they were sound.
  This bill goes a long way toward correcting those flaws, protecting 
future homeowners, and cracking down on predatory lending. It helps 
consumers get full information--the information they need to decide 
wisely on what is one of the biggest financial commitments of their 
lives. It prevents lenders from steering borrowers into higher-cost 
loans and bans yield spread premiums and other compensatory incentives 
that lead brokers to push those loans on borrowers. It also establishes 
national standards for the protection of borrowers and ensures that 
those who entrap consumers in predatory loans are liable for adjusting 
the loan's terms and paying the borrower's costs, including attorneys' 
fees.
  Finally, this bill requires those who securitize loans to third 
parties to put ``skin in the game'' and retain interest in at least 5% 
of the credit risk of each loan they sell or transfer. This provision 
will ensure that, at every link of the chain, there is an interest in 
seeing that the loan is repaid and that the homeowner does not go into 
foreclosure.
  Mr. Chair, this is a strong, carefully deliberated response to the 
foreclosure crisis, one that rules out many of the unscrupulous 
practices that harmed so many responsible families--and helped put an 
entire economy at risk. I believe that if these provisions had been in 
place 10 years ago, the foreclosure crisis might have been averted. We 
cannot turn back time. But we can learn--and if we have learned 
anything, it is how much we need legislation like this. I urge my 
colleagues to support it.

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