The Senate in a 60-39 vote passed landmark legislation to create new oversight structures for financial services firms and increase protection of consumers with a new Consumer Financial Protection Bureau.
The 2,300-page bill, called the Dodd-Frank Wall Street Reform and Consumer Protection Act, includes several pieces that touch on real estate finance, including a title to reform the regulation of subprime and other non-standard mortgage products.
The mortgage reform aspects will curb incentives to lenders to originate loans for consumers that might not be the best possible for them. The reforms also will require lenders that originate stated income loans to ensure borrowers have the means to meet repayment terms.
Since the non-conventional mortgage loan market has largely dried up since the credit crunch, the reforms are geared mainly toward averting future excesses that could hurt borrowers and the broader economy.
The House passed the legislation earlier, following the reporting out of the bill by a House-Senate conference committee. With Senate passage, the bill now goes to President Obama, who is expected to sign it.
An overview of the subprime mortgage reform portion of the bill is included in a short video on REALTOR® Magazine's Speaking of Real Estate blog.
Source: REALTOR® Magazine
