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Mortgage Reform and Anti-Predatory Lending Act of 2007

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Location: Washington, DC


MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT OF 2007 -- (House of Representatives - November 15, 2007)

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Mr. BAKER. I thank the gentleman for his courtesy. I shall try to be brief. I had hoped at the outset the bill would present a uniform national standard so all those engaged in this practice would have legal certainty as to the behavior that complies with the law, no matter where one might extend credit. Unfortunately, that is not the case in the underlying bill.

I had hoped more clarity in the provisions of enforceability. I am troubled by some of the unclear language, the way in which some descriptive phrases have been used, as in, for example, the anti-steering provision, which states that loan products which have predatory characteristics, one cannot be sure what constitutes a predatory characteristic. Third, in contract resolution, we had hoped that we would at least avail ourselves of mandatory arbitration, which is a common business practice to resolve differences without the court being involved. Unfortunately, the bill in its current form prohibits mandatory arbitration, which leads us then to the gentleman's very well-thought-out amendment relative to the safe harbor provision.

At least we should have the statement that if you engage in lending practices of a certain type, that there will be legal certainty you will not be sued at some future point for engaging in the honorable profession of extending credit to people trying to buy homes.

On that point, let me quickly add that 95 percent or more of the people engaged in this practice are honorable people, doing a public service, extending credit to people who pay their obligations on time. It is a mischaracterization on this floor to represent that all people engaged in the business of extending credit for this honorable purpose are up to no good. In fact, when foreclosures occur, it actually costs the industry business.

This is not a helpful environment. We would be legislating with certainty, and the bill in the underlying form does not provide that. The gentleman's amendment is excellent, well-constructed. I hope the House will favorably consider it.

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