Mortgage Reform and Anti-Predatory Lending Act
Floor Speech
MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT -- (House of Representatives - May 07, 2009)
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Mr. MOORE of Kansas. I rise today with my colleagues from Maryland and Ohio, Congressman Frank Kratovil and Congresswoman MARY JO KILROY, in offering this income ver i fi ca tion amendment to H.R. 1728.
It is well known that the misrepresentation and the unverified nature of a borrower's income was a contributing factor to the mortgage crisis. Some borrowers purposely misstated or altered their incomes on documents in order to qualify for loans they couldn't afford, and some lenders either ignored or encouraged that practice.
Columnist Gretchen Morgenson wrote last year: ``While borrowers may have misrepresented their incomes, either on their own or at the urging of their mortgage brokers, lenders had the tools to identify these fibs before making the loans. All they had to do was ask the IRS.''
Our amendment would require lenders to do this by simply verifying the borrower's income documentation with the IRS. They already have a program to do this, the Income Ver i fi ca tion Express Service. This program utilizes IRS tax transcripts to verify a borrower's income within 2 business days, often the same day, for less than $5. This simple step will help catch fraudulent behavior before a lender closes on a loan that a borrower may not be able to afford.
In his recent report to Congress, the special investigator inspector general for TARP recommended third-party ver i fi ca tion of income like this IRS tax transcript program to prevent fraud. Income ver i fi ca tion will strengthen the integrity of our mortgage system by ensuring borrowers receive a loan they can repay, lenders underwrite loans that are less likely to default, investors regain their confidence in the securitization process, and in the case of government-supported loans, taxpayers are protected.
I urge my colleagues to support our income ver i fi ca tion amendment.
I reserve the balance of my time.
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