HR 3915 – full steam ahead

House passes controversial anti-predatory-lending bill (Inman News)

HR 3915 receives bipartisan support

The House of Representatives Thursday approved controversial legislation intended to combat predatory lending, amending some provisions to address criticism that the bill could worsen the credit crunch, but strengthening others.

HR 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, would create a national licensing system for mortgage loan originators and require lenders to determine that borrowers have a reasonable ability to repay a loan. The bill would also create limited liability for companies that bundle mortgages for sale to Wall Street investors.

Although the Bush administration opposes many of the bill’s provisions, HR 3915 received bipartisan support in the House, where it was approved in a 291-127 vote.

Whether some of its more controversial provisions are embraced in the Senate remains to be seen. Sen. Christopher Dodd, D-Conn., is expected to introduce legislation with similar goals, but which may not incorporate all of the new restrictions envisioned by the House.

The House bill’s most contentious restrictions include a ban on incentive payments brokers and loan officers receive when they place borrowers in high-cost loans, and prohibitions on prepayment penalties used to discourage borrowers from refinancing their loans.

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