A bill that would require lenders to make loans borrowers can afford to repay was introduced Monday in the U.S. House of Representatives.

The package -- which lists as a sponsor Rep. Barney Frank, D-Mass, chairman of the House Committee on Financial Services -- would clarify that regulations apply to all major parties involved in making loans, particularly brokers and independent lenders who have been generally overlooked, the Los Angeles Times reported.

The measure also would fix some liability on Wall Street firms that package mortgages and resell them as securities, as well as would mandate adequate proof of income by those who seek home loans.

"If this had been law (in January 2006), I think it would have avoided some of the problems we have now," Frank said during a news conference.

He said the bill contains "common sense principles" that "will diminish predatory lending while continuing to support a vigorous mortgage market."

The lawmaker said the bill could pass out of his committee as soon as next week and be voted on by House members before Thanksgiving. // Copyright 2007 by United Press International


Publication date: 23 October 2007   

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