Mortgage Reform and Anti-Predatory Lending Act
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Mr. PASCRELL. Mr. Chairman, I hope folks are watching and listening. We had a debate on credit cards. You heard the debate last week. Now you know who is on the side of the consumer and who is dealing in gibberish.
Secondly, we have a debate today on the Anti-Predatory Lending Act. There is no doubt about this. To insinuate that the primary problem is with those who borrow the money is outlandish and cannot be backed up with any data whatsoever. So I rise in strong support of H.R. 1728, which would curb the abusive and predatory lending that led directly to the subprime mortgage crisis and the recession we now face.
I want to thank Chairman Frank for his hard work on this legislation. In my county of Passaic, New Jersey, one out of every 21 homes is in foreclosure.
In my hometown of Paterson, New Jersey, 2,700 mortgages are currently in default; that is one out of seven. And to hear the other side--or many on the other side, that is--is outlandish. You cannot support what you're talking about. My district office receives dozens of calls every day from my constituents who cannot pay their skyrocketing mortgages and fear imminent eviction.
For years, as the housing bubble grew, unscrupulous brokers, in a quest for higher commissions and higher profits, preyed on the American Dream of homeowners by signing borrowers, many of them unqualified, up for risky, adjustable rate, subprime mortgages. That is what we are talking about today. That is what we are going to correct.
Subprime, high-interest and high-fee mortgage lending grew from 8 percent of the total mortgage lending in 2003 to 28 percent in 2006. Additionally, of the subprime mortgages originating in just 2004 to 2006----
The CHAIR. The gentleman's time has expired.
Mr. WATT. I yield the gentleman an additional 30 seconds.
Mr. PASCRELL.--in those 2 years, Mr. Chairman, 90 percent came with an exploding adjustable interest rate. How do you blame that on the borrowers? Seventy percent came with a prepayment penalty. How can you blame that on the borrowers? Seventy-five percent included no escrow for taxes and insurance, and over 40 percent were approved without fully documented income. They didn't ask it. They didn't even ask it. They are responsible to lenders.
By 2007, according to the Joint Economic Committee, these subprime mortgages were being foreclosed at the rate of 10 times more than fixed rate mortgages.
I hope we support this legislation, Mr. Chairman.