Introduced
by
To prohibit a lender from making a subprime, adjustable-rate mortgage unless the lender has verified the "reasonable ability" of a borrower to repay a loan and documented the borrower's income using specified means. A scheduled loan payment could not be more than double the earlier payments; repayment penalties, “negative amortization” loans, imposing higher default interest rates, and other practices would be prohibited; and new disclosures would be required for subprime home loans. The bill is part of a subprime home loan regulation package comprised of House Bills 5287 to 5310 (HB 5295 in particular).
Referred to the Committee on Banking and Financial Services
Reported without amendment
With the recommendation that the substitute (H-1) be adopted and that the bill then pass.
Substitute offered
To replace the previous version of the bill with one that revises details based on extensive testimony and "fine tuning." See House-passed version.
The substitute passed by voice vote
Amendment offered
by
To tie-bar the bill to a package of Republican bills limiting the imposition of some special assessments, increasing penalties for mortgage fraud, and repealing the .75 percent real estate transfer tax (House Bills 4264, 4409 - 4411, 5642-5647, 6128 and 6129). "Tie-bar" means this bill cannot become law unless those ones do also.
The amendment failed by voice vote
Passed in the House 81 to 28 (details)
To prohibit a mortgage lender from making a "high cost" (subprime) home loan without ensuring that the borrower had received counseling from an approved nonprofit on the advisability of the loan; charging prepayment fees or penalties; paying a contractor for home improvements from the proceeds of a loan unless the payment was payable to the borrower, or to both, or to an escrow account; charging a fee to modify, renew, extend, or amend a loan or defer any payments; financing points or fees in excess of 2 percent of the loan amount; or increasing the interest rate after a default. Payments on a "high cost loan" would have to cover all the interest due.
Referred to the Committee on Banking and Financial Institutions
