May 8, 2009

Today, U.S. Rep. Ed Perlmutter, a member of the House Financial Services Committee, included an amendment within HR 1728, the Mortgage Reform and Anti-Predatory Lending Act, to help stabilize the housing market.

Perlmutter’s amendment allows home buyers to take possession of the house within 30 days instead of 90 days if the prior owner was renting out the house in violation of a mortgage contract at the time the property was sold.

The Perlmutter amendment was approved by a voice vote in the House of Representatives.

HR 1748 stops predatory and irresponsible mortgage loan practices contributing to the current financial downturn. The bill includes tough accountability measures to prevent borrowers from deliberately misstating their income to qualify for a loan, while making sure the mortgage industry follows basic principles of sound lending.

“In the wake of record foreclosures, this bill implements responsible, balanced safeguards to ensure consumers can purchase homes, pay their mortgage and contribute to the safety and prosperity of their communities,” said Perlmutter. “At the same time it restores integrity to the mortgage lending industry preventing them from steering borrowers into higher cost loans.”

The bill includes the following principles:

ü borrowers can repay the loans they are sold;

ü mortgage lenders make loans that benefit the consumer and prohibit them from steering borrowers into higher cost loans;

ü the secondary mortgage market, for the first time ever, is responsible for complying with these common sense standards when they buy loans and turn them into securities;

ü there are incentives for the mortgage market to move back toward making safe, fully documented loans; and

ü tenants renting homes that are foreclosed would receive notification and some time to relocate.

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