Committee OKs Comprehensive Bill to Fight Predatory Lending
NEW YORK –The U.S. House Committee on Financial Services today approved the Mortgage Reform and Anti-Predatory Lending Act (H.R. 1728), legislation aimed at curbing predatory lending practices. The bill prevents financial institutions from unfairly providing loans to borrowers that do not have a ‘reasonable ability to repay.’ Included in this bill is an amendment from Congresswoman Nydia M. Velázquez (D-N.Y.) that strengthens legal counseling services by providing prospective homebuyers with increased access and information on the benefits of home inspections.
“The American dream of homeownership is more than simply buying a home, it’s buying the right home with payments that are affordable,” Velázquez said. “Many New York communities, particularly our minority communities, have been targeted by predatory lending. These dishonest practices led us into the housing crisis, and by fighting back we can make sure it never happens again.”
The Congresswoman’s initiative, based on her Consumer Protection Home Inspection Counseling Act (H.R. 2130), requires counselors at the Department of Housing and Urban Development to be trained on voluntary home inspections. This will help ensure consumers receive information about the benefits of a home inspection while they still have time to take advantage of the service. The bill also includes a public outreach campaign targeting vulnerable populations, such as low-income and first-time home buyers.
“Improved counseling services will empower New Yorkers to make informed decisions about what is best for them and avoid predatory lending practices. Knowledge is one of the most powerful tools we have to fight the home foreclosure crisis,” Velázquez said.
Given the current economic climate, with home foreclosures impacting over two million homes between 2008 and 2009, strengthened counseling services are needed now. Homeowners struggling to make payments often lack the resources necessary to repair and maintain their homes, which can have a negative impact on the value of a home and the owner’s ability to sell. Potential buyers need to be fully informed of the property’s condition.
“A professional inspection provides a leg up when dealing with lenders and can save thousands of dollars in repairs down the road. With their home often the largest investment a New Yorker makes, it’s important to have the tools necessary when sitting down at the negotiating table.” Velázquez said.
The Mortgage Reform and Anti-Predatory Lending Act now goes to the full House of Representatives for approval, after which it would be sent to the Senate for consideration. Velázquez is the most senior New York Member on the Financial Service Committee’s Subcommittee on Housing and Community Opportunity.