Legislation approved by the U.S. House of Representatives could leave mortgage lenders battling a patchwork of state and local laws. Another provision could force many mortgage bankers out of business.
H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009, was passed by the House, the Mortgage Bankers Association announced today.
MBA applauded the removal a cram-down amendment in the final bill.
But that was about all the trade group had to say that was positive.
MBA criticized the legislation’s empowerment of state and local laws that will leave lenders with a patchwork of regulations to deal with.
The Washington, D.C.-based organization said risk-retention provisions of the bill could make it impossible for hundreds of non-depository lenders to remain profitable. The impacted group accounts for around one-quarter of U.S. originations.
“On top of that, depository institutions will have to restrain their lending to meet the new requirements,” MBA Chairman Robert E. Story warned in the statement. “Eliminating that much lending capacity will surely increase costs and limit borrowing options for many qualified homebuyers.”
MBA said it will focus its lobbying efforts on the U.S. Senate, which is now beginning to debate the bill.