On November 16, 2007, the House passed H.R. 3915, designed to prevent a repeat of the problems associated with the subprime lending crisis. Robert M. Jaworski, examines the bill that could dramatically alter the residential mortgage loan origination landscape. Mr. Jaworski writes:

The most critical sections of the Bill would: (1) impose minimum licensing or registration requirements upon all residential mortgage loan originators; and (2) amend the Truth-in-Lending Act (“TILA”) to (a) impose minimum loan origination standards upon mortgage loan originators, (b) prescribe minimum standards and require additional disclosures in connection with residential mortgage loans, and (c) expand and toughen rules relating to loans covered by the Home Ownership and Equity Protection Act (“HOEPA”). Highlights of these sections are set forth below. Additionally, the Bill would (1) establish a federal Office of Housing Counseling to create and administer counseling programs relating to housing, homeownership, mortgages and rental housing; (2) require additional items of information to be disclosed to consumers as part of the good faith estimates mandated by the Real Estate Settlement Procedures Act (“RESPA”); (3) revise RESPA rules applicable to servicers (to mandate the establishment of escrow accounts in connection with certain loans and require servicers to satisfy certain conditions before they can force-place insurance); (4) require creditors to provide copies of appraisals to all HOEPA-loan borrowers prior to closing and prohibit any person with an interest in a loan from attempting to coerce, extort, induce, bribe or intimidate an appraiser’s judgment as to the value of a property for purposes of qualifying for a mortgage loan; and (5) appropriate money to the Department of Justice for use in combating fraud.

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