House Panel Votes to Revise Mortgage Market Standards
April 29 2009 - A U.S. House panel approved legislation that would prevent lenders from transferring all mortgage risk as part of a bid to boost consumer protection during the deepest housing slump since the Great Depression.
The measure, passed today by the House Financial Services Committee on a 49-21 vote, also would limit upfront commissions to mortgage brokers and revise other standards.
Lawmakers said they were trying to curb lending abuses that contributed to record losses on securities linked to mortgage payments and a 24 percent increase in U.S. foreclosure filings in the first quarter from a year earlier.
“If this bill passes, there will continue to be a vigorous mortgage market, and it will continue to function better,” said Committee Chairman Barney Frank, a Massachusetts Democrat.
The bill would require lenders, bond investors and others involved in the repackaging of home loans into securities to retain a minimum of 5 percent credit risk.
House Panel Votes to Revise Mortgage Market Standards
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