“This bill takes a crucial step forward in strengthening consumer protections against reckless and abusive lending practices,” said Kildee.  “We have taken action to correct the predatory practices that have caused the worst slump in the housing market in 16 years.”

H.R. 3915 establishes federal standards that would require lenders to determine that a borrower has a “reasonable ability to pay,” based on income, credit history, debt, and other factors.  The bill would also restrict yield spread premiums by prohibiting financial incentives that encourage lenders to guide borrowers into more costly loans.

“This bill is based on common sense principles -- ensuring that homeowners can repay their loans, that they receive clear disclosure about their loans, and that all mortgage bankers and loan officers are licensed or registered,” said Kildee.

Additionally, the bill would require lenders to disclose the maximum amount that consumers could pay on a variable rate mortgage so that the new homeowners would have the information necessary to make wise financial decisions.

The House of Representatives has passed several bills in recent months to help dampen the impact of the subprime mortgage crisis and to make homeownership more possible.  Measures have addressed several key issues:

·     Encouraging large financial institutions to create more affordable mortgage options for people facing foreclosure;

• Reforming the Federal Housing Administration to help people at risk of foreclosure stay in their homes with affordable loans and refinancing options;
• Expanding housing counseling for distressed families who are at-risk of losing their homes; and
• Increasing the supply of affordable housing across the country.

The Mortgage Reform and Anti-Predatory Lending Act requires the approval of the Senate and the signature of the President to be enacted.