Proposed Bill will reduce choices in Mortgage Loans

HR 3915 contains three provisions that would be very harmful and dangerous to consumers with regard to their choices in mortgage loans. It is important to make some much needed changes to the mortgage industry, but the current form of this bill will do more harm than good. The following provisions should be removed from this bill:

1. Elimination of Yield Spread Premium - Right now, mortgage brokers can structure a loan so that the lending institution pays the mortgage broker for origination the loan. Without this option, the availability of no point and no fee loans to borrowers will be eliminated. This will increase the expense to the borrower of obtaining the loan, and will also reduce healthy competition among mortgage brokers and banks.

2. Net Tangible Benefit Requirements - Proposals to legislate whether a refinance has a benefit to the borrower or not, is impractical in the real world, would be hard to enforced and would cause unnecessary litigation. It also takes the responsibility away from the consumer and gives it to the government when determining whether they should refinance or not.

3. Legislating Underwriting Guidelines - Will greatly limit market based innovation, and reduce the number of financial choices available to consumers. Rather than jumping into the mortgage business, the government should require the industry to act in a responsible manner.

The three provision listed above, are not consistant with the personal freedoms inherent in the American way of life.