House passes new mortgage lending bill

The U.S. House of Representatives passed a new mortgage lending bill (H.R. 3915)  on Thursday evening by a 291-127 vote.

The new House bill, called the “Mortgage Reform and Anti-Predatory Lending Act of 2007″ focuses on protecting potential borrowers from abusive home loan bills.  However, the bill has received tough opposition from Republicans and the mortgage industry.

The new bill, if it passes the Senate where it faces tougher opposition, will create a national registry of loan originators, regardless of where they work.   It will also establish stricter standards for originators that include requiring criminal background checks, finger prints, and continuing education with tests.

Additionally, the bill will put a stricter limit on what it considers a high-cost loan.  Previously, the total of all fees could not exceed 8 percent.  Under Title III in H.R. 3915, total fees can not exceed 5 percent.  This of course, will become a problem for smaller loans where often fixed fees will trigger this alone.