House Financial Services Committee Chairman Barney Frank today released the following statement on pending housing legislation in the House of Representatives:
"Turmoil in the American mortgage markets is at the root of a financial crisis that has undermined confidence in and threatens the stability of the global financial system. Congress will soon send the president a comprehensive package of legislation that makes future crises less likely by: 1.) responding to the current situation; 2.) strengthening regulatory oversight and prohibiting the irresponsible lending practices that brought us here; and 3.) addressing the lack of affordable housing in America.
"First, the legislation we will pass creates a new regulator for the GSEs with strong additional powers. We also make it possible for the FHA to assist homeowners facing foreclosure by refinancing them into sustainable loans. The bill will also strengthen the FHA's capacity to resume its historical role as a lender of first resort for working families and first time homebuyers.
"Second, the bill will include the proposals announced yesterday by Secretary Paulson to ensure that Fannie and Freddie have the resources they need to continue to play their vital role in America's housing finance system.
"Third, in a long overdue measure, the legislation creates an affordable housing trust fund that allows us to address decades of under investment in the supply of housing for lower income families.
"In addition, the Federal Reserve today has adopted regulations implementing the Homeowners Equity Protection Act, passed in 1994, so that the predatory and deceptive lending practices that led to the subprime crisis will be prohibited. Those new rules combined with H.R. 3915, the The Mortgage Reform and Anti-Predatory Lending Act of 2007', which the House passed last yearand that Senator Dodd assures me the Senate will address this year--will make the problem of irresponsible lending far less likely in the future."