Mortgage Reform Bill Passes the House: Sweeping Changes to Federal Regulation Are on the Horizon


On November 15, 2007, by a vote of 291-127, the House of Representatives passed the Mortgage Reform and Anti-Predatory Lending Act of 2007 (“H.R. 3915”). Broad bipartisan support for the bill — 100 percent of Democrats and 67 percent of Republicans — ensures that sweeping

changes to federal regulation in this area are a virtual certainty. The Senate is also expected to introduce a mortgage reform bill in the coming weeks. While the impending Senate bill and negotiations with the White House will likely produce some changes to this pending legislation, the key features of the House bill, outlined below, indicate the direction that it will take.

H.R. 3915 arose in response to the recent sub-prime mortgage crisis, its widespread impact on financial markets, and the resulting foreclosures of millions of consumer mortgages. Financial Services Committee Chairman Barney Frank described the bill's origins as follows:

We are dealing with legislation that seeks to prevent a repetition of events that caused one of the most serious financial crises in recent times. There is no debate about ... the largest single cause of that. Innovations in the mortgage industry ... are good and useful, but [some innovations] were conducted in ... a complete[ly] unregulated manner and led to this crisis.

The bill amends the Truth in Lending Act (“TILA”) in order "to reform consumer mortgage practices, to provide accountability for such practices, to establish licensing and registration requirements for residential mortgage originators, [and] to provide certain minimum standards

for consumer mortgage loans."

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