Republican Lawmaker Introduces Subprime Legislation
The top Republican on the U.S. House Financial Services Committee introduced legislation that would create a national registry and set new standards for mortgage originators in response to the subprime mortgage crisis.
Spencer Bachus, of Alabama, said in a statement that his bill, called the Fair Mortgage Practices Act, would curb unscrupulous lending and increase consumer protections.
The bill would set licensing standards for mortgage loan originators and log those lenders in a national registry, the lawmaker said in a statement.
Loan originators would have to submit to a criminal background check and FBI fingerprinting, and loan originators convicted of fraud would not qualify under the new licensing standards, according to the legislation.
The bill also would require mortgage lenders to weigh a borrower's ability to repay the loan and would restrict penalties against homeowners who refinance out of a high-cost loan. Those two provisions are already integrated into new subprime principles set by bank regulators last month.