Press Release

"Today, we took a major step to restore our economy and bring common sense reform and consumer protection to the housing and financial markets," Congressman Cummings said. "This legislation requires unprecedented accountability and transparency in order to end the unscrupulous practices that lending institutions used to keep growing their profits at the expense of hardworking Americans."

The legislation would require that lending institutions ensure that borrowers can repay the loans they are sold. Statistics show that many homeowners in the current mortgage crisis were steered into more expensive loans than they were qualified to receive. The bill would outlaw this practice and encourage the market to move back toward making fixed-rate, fully documented loans. The bill would also protect tenants who rent homes that enter foreclosure, ensuring that they receive proper notification and are given time to relocate.

The bill also includes language authored by Congressman Cummings that requires creditors to explain their policies regarding the acceptance and application of partial payments. Lenders are further required to notify borrowers of all consequences of refinancing or purchasing a home equity loan, including the responsibility they may bear for any losses incurred in the event of a foreclosure. Congressman Cummings also worked to include a protection that would allow current state law to prevail if it carries stronger remedies for borrowers than federal law.

"We have rushed to fix the crises on Wall Street brought on, in part, by scheming mortgage lending practices," Congressman Cummings said. "The time is long overdue for us to address the crises that individual families are facing all across the country as a result of these practices."

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