Frank opens discussion on mortgage bill today

WASHINGTON (10/24/07)—Reps. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, opens discussion today on his mortgage reform bill, The Mortgage Reform and Anti-Predatory Lending Act of 2007 (H.R. 3915).

The bill was introduced Monday by Frank, Rep. Brad Miller (D-N.C.) and Rep. Mel Watt (D-N.C.). It is intended to combat abuses in the mortgage lending market and to provide basic protections to mortgage consumers and investors.

Today's hearing, entitled Legislative Proposals on Reforming Mortgage Practices, is scheduled to feature three panels of witnesses representing 16 different federal and state agencies, consumer groups, and financial industry officials. Included on the regulators' panel are:

• JoAnn Johnson, Chairman, National Credit Union Administration;

• Sheila Bair, Chairman, Federal Deposit Insurance Corporation '

• John Dugan, Comptroller, Office of the Comptroller of the Currency;

• John Reich, Director, Office of Thrift Supervision;

• Randall Crosser, Governor, Board of Governors of the Federal Reserve System; and

• Steven Intonates, Commissioner, Massachusetts Division of Banks.

Frank, when announcing the bill's introduction, said it proposed to do three things:

First, it would establish a federal duty of care, prohibit steering, and call for licensing and registration of mortgage originators, including brokers and bank loan officers.

Second, it would, if enacted, set a minimum standard for all mortgages which states that borrowers must have a reasonable ability to repay.

And third, the legislation would attach limited liability to secondary market securitizers who package and sell interest in home mortgage loans outside of these standards.