MBA's Kittle Testifies on Mortgage Reform

David G. Kittle, chairman of the ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) and EVP at Vision Mortgage Capital, LLC, testified before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit on Wednesday. At the Capitol Hill hearing, Kittle laid out the principles of MBA's proposal to reform oversight of the mortgage industry and called for fundamental change in mortgage regulation.
In his ""statement to lawmakers"":http://www.mortgagebankers.org/files/AU/2009/MBATestimony_MortgageLendingSystemandProposalstoReformthatSystem_3-11-2009.pdf, Kittle said, ""We believe that our industry must be central to solutions that restore faith in the market and protect future borrowers. We know that these proposals will constrain some in our industry, but they will also help our members and their customers in the long-run.""
According to Kittle, reform efforts should build upon the work done in the last Congress on the Mortgage Reform and Anti-Predatory Lending Act of 2007 (H.R. 3915), as well as the Federal Reserve's Home Ownership Equity Protection Act (HOEPA) rules. But, Kittle said that changes now should take into account not only the many problems exposed since the end of 2007, but also the numerous legal and regulatory changes that have occurred since then.
While many domestic regulatory agencies, as well as the G-20 nations, have already begun work on reform proposals, Kittle told the congressional subcommittee members that MBA's own proposal for regulatory change would be forthcoming soon. MBA's proposal, Kittle said, will be a comprehensive approach that will apply across the country and affect lenders of all sizes and structures.
Kittle said that mortgage lending reform measures should not be ""piecemeal,"" but need to be applied across-the-board. ""Reform legislation should provide a rigorous new regulatory standard to protect consumers regardless of where they live,"" Kittle said. ""A single set of consumer protection rules should be dynamic and able to quickly respond to new concerns. Federal and state officials should work together to revise the national standard to address new abuses and concerns.""
Kittle also said that reform must address consumer disclosures now governed by the disparate Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA), and should assure better resources for counseling, financial literacy, and fighting mortgage fraud.
Subcommittee Chairman ""Luis V. Gutierrez"":http://luisgutierrez.house.gov/ (D-Illinois) said the issue of reining in the abusive lending practices that contributed to the current mortgage crisis and national economic downfall are now a top priority - in 2007, H.R. 3915 was not supported by the Bush administration and not taken up by the Senate. House Financial Services Committee Chairman ""Barney Frank"":http://www.house.gov/frank/ (D-Massachusetts) is expected to bring mortgage reform legislation to the congressional floor later this month.