The Mortgage Reform and Anti-Predatory Lending Act

by Jeff Sovern

Buried deeply within the House financial reform bill--beginning at page 1472--is the Mortgage Reform and Anti-Predatory Lending Act.  This bill has no precise analog in the Senate bill, though some of its provisions are echoed in the Senate CFPB bill (in my slides, I didn't discuss this bill, except to the extent that the Senate bill included the same or similar provisions).  I haven't seen much about the MRAPLA in the media or, for that matter, the blogosphere, but, based on a quick look, some of its provisions seem very important.  For example, § 9002 requires mortgage originators to "diligently work to present the consumer with a range of residential loan products for which the consumer likely qualifies and are appropriate to the consumer's existing circumstances;" to disclose to consumers the "comparative costs and benefits" of each loan discussed by the originator; and to tell the consumer if the originator is "acting as an agent for the consumer."  Section 9106 prohibits arbitration clauses.  The MRAPLA also includes a subtitle on high-cost mortgages.  I'm not sure what will become of these provisions, but I hope some of the MRAPLA makes it into the final bill.  If someone has studied the MRAPLA and has summarized its provisions, I hope you will post the summary in the comments below or email them to me.

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