On Thursday, the House passed the Mortgage Reform and Predatory Lending Act of 2007. The House voted 291 to 127 to approve legislation that would curb common abusive practices in the subprime mortgage market. These abuses are blamed for massive foreclosures.
The bill still requires Senate approval. Some consumer advocates, including the Center for Responsible Lending, are calling on the Senate to strengthen the bill.
The Senate version likely will not include several provisions pushed by many consumer protection advocates. It is expected to be passed without many of the stronger protections that the mortgage industry opposes.
These desired changes include protection of existing state laws and accountability on Wall Street for purchases of abusive loans. Most importantly, homeowners could have additional rights if their lenders broke the law.
Loan modification would be a valuable last resort option for homeowners facing foreclosure. It would allow delinquent homeowners ways to restructure the terms of the loan to better help them afford repayment.
The Senate bill will depend mostly on what mortgage industry lobbyists want. To some degree, consumer advocates and the general public may be able to persuade the Senate to vote on a stronger version. Either way, The Mortgage Reform and Predatory Lending Act of 2007 should reduce some of the volatility in the subprime mortgage industry in coming years.
