WASHINGTON, DC – May 13, 2009 – (RealEstateRama) — Congressman Phil Roe (TN-1) continues to fight for fundamental reform and accountability in many ways, including reform of organizations such as Freddie Mac and Fannie Mae. However, HR 1728 makes no mention of these entities, it encourages excessive litigation for foreclosure related issues and it simply slows down the housing recovery process by undermining current efforts that are already underway.
Furthermore, Roe opposed HR 1728, the so-called “mortgage reform” bill. Even though this bill passed through the U.S. House of Representatives, Roe urged Congress to fix this bill before it becomes law.
“No one wants to lenders to take advantage of borrowers, and there are some good standards in this bill for mortgage originators,” said Roe. “Unfortunately, this legislation throws the baby out with the bathwater. In an effort to prevent homeowners from being misled, the bill makes it virtually impossible for some borrowers to ever get a loan.”
“One of the American dreams and one of the most important investments an American will make is purchasing a home,” said Roe. “I believe this legislation will frustrate Americans who may have had some trouble with their credit in the past from ever being able to secure a home loan in the future. Many of the positive protections in this bill have already been implemented by the Federal Reserve, but the bill goes so much further.”
Last year, new regulations implemented by the Federal Reserve instituted a national licensing and registration database for all mortgage originators. This nationwide database will bring greater accountability and professionalism to the industry. If suspicious of one’s mortgage professional, a consumer will be able to quickly access their history online.
Also, the Fed issued regulations under the Home Ownership Equity Protection Act (HOEPA) to prohibit predatory practices and products, strengthen underwriting standards, and address prepayment penalties and escrowing of taxes and insurance.
This “mortgage reform” makes no mention of these entities. Because of their practices, taxpayers are now left holding the bag for what may end up being the largest federal bailout in history – $400 billion and counting.