Congresswoman Yvette D. Clarke Supports Mortgage and Predatory Lending Reform
Congresswoman Yvette D. Clarke voted in favor of H.R. 1728, The Mortgage Reform & Anti-Predatory Lending Act of 2009. This piece of legislation curbs abusive practices and predatory lending in the mortgage industry. It also outlaws many of the egregious industry actions that marked the subprime lending boom and led to the nation’s highest foreclosure rate and worst economic crisis in decades. It marks a key step in the overhaul of the nation’s financial regulations. Congresswoman Clarke made the following remarks:
“Thank you Madame Speaker: Today I rise in strong support of H.R. 1728 The Mortgage Reform & Anti-Predatory Lending Act of 2009. This bill will finally put a stop to the abusive and predatory lending practices that have contributed to our nation’s highest home foreclosure rate in 25 years. In recent years, some homeowners were deceived and some homeowners received more expensive loans than they could afford. In response, this bill would ensure that mortgage lenders make loans that benefit the consumer– and would bar lenders from steering borrowers into higher cost loans.
Moreover, it will prohibit lenders from offering “reasonable sounding mortgages,” only to hide huge fees, rising interest rates and junk insurance in the fine print. No longer will lenders be able to “get rich” at the borrower’s expense. The Mortgage Reform & Anti-Predatory Lending Act prescribes a simple standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold, before they sign on the dotted line. Under this measure, lenders and the secondary mortgage market who don’t comply with these standards would be held liable by consumers for rescission of the loan and the consumer’s costs for rescission, including attorney’s fees. This would encourage the market to move back toward making fixed-rate, fully documented loans.
“Although increased regulation of the lending market is crucial to the resurgence of our housing market and economy– the main reason why I stand today is because of this bill promises to bridge the financial information gap. For many people, especially in my district of Central Brooklyn, homeownership allows them to live independently and in relative comfort, while slowly accruing wealth simply by staying in one place. But predatory lending and mortgage fraud undermines a low-income homeowner’s grasp on economic security, leaving the most vulnerable of our society with insurmountable debt. Thereby, continuing the cycle of poverty.
“In the case of the 11th Congressional District, most foreclosure victims live in low and moderate income working class communities, where conventional financial services are not available. Corrupt lenders prey on these people, offering loans they know the borrower can’t afford. Good lending advice should always be available to all. The Mortgage Reform & Anti-Predatory Lending Act directs the Secretary of Housing and Urban Development to establish a grant program to provide legal assistance to low income homeowners and tenants concerning home ownership preservation, foreclosure prevention, and tenancy associated with home foreclosure. These grants would be given out to qualifying state and local governments and nonprofit organizations offering homeownership or rental counseling. This would help level the playing field for those most susceptible to the corrupt dealings of predatory lenders.
“Addressing the mortgage foreclosure crisis is one of my top priorities. This is why, the day after I was sworn into office, this year, I proudly voted for the Systematic Foreclosure Prevention Act which directed the FDIC to create a program that would provide incentives to loan servicers for mortgage modifications. Additionally, earlier this year– I introduced my own legislation, H.R. 1848, the Foreclosure Prevention Act –that authorizes an appropriation of $100 million dollars to Neighbor Works America for foreclosure mitigation activities and mortgage counseling. I am very pleased that the principals of my bill were adopted into the Mortgage Reform & Anti-Predatory Lending Act.
“Lastly, I am proud that we are doing what must be done to rebuild our economy in a way that is fair and consistent with our values. Again, I stand in strong support of H.R. 1728, and pledge to continue my fight for common sense reform and consumer protections.”
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