Rep. Johnson proud to vote for mortgage reform, consumer protection
May 7, 2009
WASHINGTON -- After years of fighting predatory lending that dates to his time as DeKalb County commissioner, Congressman Hank Johnson (GA-04) was proud May 7 to support H.R. 1728 – “The Comprehensive Mortgage Reform and Anti-Predatory Lending Act of 2009.”
The bill passed the House 300 to 114 and now goes to the Senate.
On Thursday, he hailed House passage of the bill as “crucial to beginning long overdue reforms that could stop the kinds of predatory lending and irresponsible mortgage loan practices” that played a major role in the current financial meltdown.
“We (in the Fourth District) have been targeted aggressively by predatory lenders for many years,” said Johnson. “This is despite the fact that residents were qualified for prime loans. These subprime, predatory loans with exorbitant interest rate swings and balloon payments in many respects caused this foreclosure crisis and consequently contributed greatly to the recession.”
Specifically, the Mortgage Reform and Anti-Predatory Lending Act ensures that mortgage lenders make loans that benefit consumers and prohibits them from steering borrowers into higher-cost loans.
It will, in effect, prevent borrowers from deliberately misstating their income to qualify for a loan. For the first time ever, it holds accountable all of those who originate, sell and buy loans, including those on Wall Street who buy and bundle mortgages for profit.
The bill will require lending institutions ensure that borrowers can repay the loans that are sold. It also requires that all mortgage refinancing loans benefit the consumer and encourages the market to move back toward fully documented loans.
The Mortgage Reform and Anti-Predatory Lending Act builds on the other consumer protection legislation recently passed by the House, including the Credit Cardholders’ Bill of Rights and the Fraud Enforcement and Recovery Act, which Johnson supported.
As a county commissioner, Johnson’s first piece of legislation in 2001 was to prevent DeKalb County from doing business with predatory lenders or mortgage companies and their affiliates that dealt in subprime loans. He was the first public official in Georgia to successfully address the foreclosure crisis and its ties to the subprime lending industry.
FORECLOSURES FILED, COMPLETED
2008 (1ST QTR.) 2009 (1ST QRT.)
County Filed Completed % Filed Completed %
DeKalb 2,911 1,444 49 3,198 1,019 32
Gwinnett 2,560 1,162 45 3,924 1,176 30
Rockdale: In the first three months of 2009, 625 foreclosures were recorded, an increase of 32% from 2008. The Rockdale legal newspaper ran 1,997 foreclosure legal ads in 2008. In ’09, 895 foreclosures have been recorded.
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