The U.S. House Financial Services Committee approved legislation on Tuesday creating new consumer protection standards in the mortgage industry.
The bill drafted by Rep. Barney Frank (D-Mass.) would:
Ban lenders from making loans that borrowers don’t have the ability to repay.
Prohibit lenders from steering home owners into refinanced mortgages that don’t provide any benefit.
Make Wall Street banks that package mortgage securities into investments liable for violations of lending laws
Create a nationwide licensing system for mortgage brokers and bank loan officers.
The bill now moves to the full House. Similar legislation was introduced in May by Sen. Charles Schumer (D-N.Y.), but has been stalled in the Senate.
Source: The Associated Press, Alan Zibel (11/06/2007)
