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Should Bad Credit People be Banned from Subprime Loans?
As home foreclosures escalate, the House of Representatives voted to hold mortgage lenders responsible. Specifically to evaluate if borrowers can repay the loans, to fine lenders for steering people toward risky subprime loans, and to force lenders to get licenses.
This action is to prevent additional bad credit people from getting mortgages with low interest rates only to see those rates rise and bring monthly mortgages up to amounts they really cannot afford.
By the end of next year, over 2 million adjustable rate mortgages are scheduled to reset. Many American homeowners are projected to be deep in debt. The number of homes involved in foreclosure proceedings nationwide nearly doubled in the third quarter of this year versus last year.
According to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, "What we have today is a bill that cannot undo what happened, but makes it much less likely it will happen in the future."
Meanwhile, where would bad credit people stand for refinancing or for new home purchase? Republicans and the White House fear congressional interference with mortgage markets could make things even worse. Many Republicans feel the bill would make it harder for current borrowers to refinance due to resets at higher interest rates, and makes it difficult for poor people to get approved for new home loans.
"Congress does two things very well: one is nothing and two is overreact," said Rep. Tom Price, R-Ga. "While we have had a period here where some credit, some loans, were unwisely given, but allowing individuals, allowing Americans to purchase homes and realize their American dream is a good thing."
Included in the legislation are provisions that would:
Ban lenders from making loans that borrowers don't have the ability to repay.
Prohibit lenders from steering homeowners into refinanced mortgages that don't provide any benefit and create fines of triple the broker fee and costs.
Make Wall Street banks that package mortgage securities into investments liable for violations of lending laws.
Prohibit excessive fees for payoff information or late payments, the financing of points and fees and practices that increase the risk of foreclosure like balloon payments and encouraging borrowers to default.
Create a nationwide licensing system for mortgage brokers and bank loan officers called the Nationwide Mortgage Licensing System and Registry.
Representative Votes on the Mortgage Lender Bill
A "yes" vote is a vote in favor of the bill. Of the yes votes, 227 were Democrats and 64 were Republicans. Of the no votes, all 127 were Republicans. X equals no vote cast.
ALABAMA
Democrats: Cramer, Y; Davis, Y.
Republicans: Aderholt, N; Bachus, Y; Bonner, Y; Everett, X; Rogers, Y.
ALASKA
Republicans: Young, N.
ARIZONA
Democrats: Giffords, Y; Grijalva, Y; Mitchell, Y; Pastor, Y.
Republicans: Flake, N; Franks, N; Renzi, Y; Shadegg, N.
ARKANSAS
Democrats: Berry, Y; Ross, Y; Snyder, Y.
Republicans: Boozman, N.
CALIFORNIA
Democrats: Baca, Y; Becerra, Y; Berman, Y; Capps, Y; Cardoza, Y; Costa, Y; Davis, Y; Eshoo, Y; Farr, Y; Filner, Y; Harman, Y; Honda, Y; Lantos, Y; Lee, Y; Lofgren, Zoe, Y; Matsui, Y; McNerney, Y; Miller, George, Y; Napolitano, Y; Pelosi, X (the speaker by tradition often does not vote); Richardson, Y; Roybal-Allard, Y; Sanchez, Linda T., Y; Sanchez, Loretta, Y; Schiff, Y; Sherman, Y; Solis, Y; Stark, Y; Tauscher, Y; Thompson, Y; Waters, Y; Watson, Y; Waxman, Y; Woolsey, Y.
Republicans: Bilbray, N; Bono, X; Calvert, Y; Campbell, N; Doolittle, N; Dreier, Y; Gallegly, Y; Herger, N; Hunter, N; Issa, N; Lewis, Y; Lungren, Daniel E., Y; McCarthy, N; McKeon, Y; Miller, Gary, Y; Nunes, N; Radanovich, N; Rohrabacher, N; Royce, N.
COLORADO
Democrats: DeGette, Y; Perlmutter, Y; Salazar, X; Udall, Y.
Republicans: Lamborn, N; Musgrave, N; Tancredo, N.
CONNECTICUT
Democrats: Courtney, Y; DeLauro, Y; Larson, Y; Murphy, Y.
Republicans: Shays, Y.
DELAWARE
Republicans: Castle, Y.
FLORIDA
Democrats: Boyd, Y; Brown, Corrine, Y; Castor, Y; Hastings, Y; Klein, Y; Mahoney, Y; Meek, Y; Wasserman Schultz, Y; Wexler, Y.
Republicans: Bilirakis, N; Brown-Waite, Ginny, N; Buchanan, Y; Crenshaw, N; Diaz-Balart, L., Y; Diaz-Balart, M., Y; Feeney, N; Keller, N; Mack, X; Mica, N; Miller, Y; Putnam, N; Ros-Lehtinen, Y; Stearns, Y; Weldon, Y; Young, Y.
GEORGIA
Democrats: Barrow, Y; Bishop, Y; Johnson, Y; Lewis, Y; Marshall, Y; Scott, Y.
Republicans: Broun, N; Deal, N; Gingrey, N; Kingston, N; Linder, N; Price, N; Westmoreland, N.
HAWAII
Democrats: Abercrombie, Y; Hirono, Y.
IDAHO
Republicans: Sali, N; Simpson, Y.
ILLINOIS
Democrats: Bean, Y; Costello, Y; Davis, Y; Emanuel, Y; Gutierrez, Y; Hare, Y; Jackson, Y; Lipinski, Y; Rush, Y; Schakowsky, Y.
Republicans: Biggert, Y; Hastert, N; Johnson, Y; Kirk, N; LaHood, Y; Manzullo, N; Roskam, N; Shimkus, N; Weller, X.
INDIANA
Democrats: Carson, X; Donnelly, Y; Ellsworth, Y; Hill, Y; Visclosky, Y.
Republicans: Burton, X; Buyer, X; Pence, N; Souder, Y.
IOWA
Democrats: Boswell, Y; Braley, Y; Loebsack, Y.
Republicans: King, N; Latham, Y.
KANSAS
Democrats: Boyda, Y; Moore, Y.
Republicans: Moran, N; Tiahrt, N.
KENTUCKY
Democrats: Chandler, Y; Yarmuth, Y.
Republicans: Davis, N; Lewis, N; Rogers, N; Whitfield, Y.
LOUISIANA
Democrats: Jefferson, Y; Melancon, Y.
Republicans: Alexander, N; Baker, N; Boustany, N; Jindal, X; McCrery, N.
MAINE
Democrats: Allen, Y; Michaud, Y.
MARYLAND
Democrats: Cummings, Y; Hoyer, Y; Ruppersberger, Y; Sarbanes, Y; Van Hollen, Y; Wynn, Y.
Republicans: Bartlett, Y; Gilchrest, Y.
MASSACHUSETTS
Democrats: Capuano, Y; Delahunt, Y; Frank, Y; Lynch, Y; Markey, Y; McGovern, Y; Neal, Y; Olver, Y; Tierney, Y; Tsongas, Y.
MICHIGAN
Democrats: Conyers, Y; Dingell, Y; Kildee, Y; Kilpatrick, Y; Levin, Y; Stupak, Y.
Republicans: Camp, N; Ehlers, Y; Hoekstra, N; Knollenberg, Y; McCotter, Y; Miller, Y; Rogers, Y; Upton, Y; Walberg, N.
MINNESOTA
Democrats: Ellison, Y; McCollum, Y; Oberstar, X; Peterson, Y; Walz, Y.
Republicans: Bachmann, N; Kline, Y; Ramstad, N.
MISSISSIPPI
Democrats: Taylor, Y; Thompson, Y.
Republicans: Pickering, N; Wicker, N.
MISSOURI
Democrats: Carnahan, Y; Clay, Y; Cleaver, Y; Skelton, Y.
Republicans: Akin, N; Blunt, N; Emerson, Y; Graves, Y; Hulshof, N.
MONTANA
Republicans: Rehberg, N.
NEBRASKA
Republicans: Fortenberry, Y; Smith, N; Terry, N.
NEVADA
Democrats: Berkley, Y.
Republicans: Heller, Y; Porter, Y.
NEW HAMPSHIRE
Democrats: Hodes, Y; Shea-Porter, Y.
NEW JERSEY
Democrats: Andrews, Y; Holt, Y; Pallone, Y; Pascrell, Y; Payne, Y; Rothman, Y; Sires, Y.
Republicans: Ferguson, Y; Frelinghuysen, N; Garrett, N; LoBiondo, Y; Saxton, N; Smith, Y.
NEW MEXICO
Democrats: Udall, Y.
Republicans: Pearce, N; Wilson, Y.
NEW YORK
Democrats: Ackerman, Y; Arcuri, Y; Bishop, Y; Clarke, Y; Crowley, Y; Engel, Y; Gillibrand, Y; Hall, Y; Higgins, Y; Hinchey, Y; Israel, Y; Lowey, Y; Maloney, Y; McCarthy, Y; McNulty, Y; Meeks, Y; Nadler, Y; Rangel, Y; Serrano, Y; Slaughter, Y; Towns, Y; Velazquez, Y; Weiner, Y.
Republicans: Fossella, N; King, Y; Kuhl, N; McHugh, Y; Reynolds, N; Walsh, N.
NORTH CAROLINA
Democrats: Butterfield, Y; Etheridge, Y; McIntyre, Y; Miller, Y; Price, Y; Shuler, Y; Watt, Y.
Republicans: Coble, N; Foxx, N; Hayes, Y; Jones, Y; McHenry, N; Myrick, N.
NORTH DAKOTA
Democrats: Pomeroy, Y.
OHIO
Democrats: Jones, Y; Kaptur, Y; Kucinich, X; Ryan, Y; Space, Y; Sutton, Y; Wilson, Y.
Republicans: Boehner, N; Chabot, Y; Hobson, Y; Jordan, N; LaTourette, Y; Pryce, Y; Regula, Y; Schmidt, N; Tiberi, Y; Turner, Y.
OKLAHOMA
Democrats: Boren, Y.
Republicans: Cole, N; Fallin, N; Lucas, N; Sullivan, N.
OREGON
Democrats: Blumenauer, Y; DeFazio, Y; Hooley, Y; Wu, Y.
Republicans: Walden, N.
PENNSYLVANIA
Democrats: Altmire, Y; Brady, Y; Carney, Y; Doyle, X; Fattah, Y; Holden, Y; Kanjorski, Y; Murphy, Patrick, Y; Murtha, Y; Schwartz, Y; Sestak, Y.
Republicans: Dent, Y; English, Y; Gerlach, Y; Murphy, Tim, Y; Peterson, N; Pitts, N; Platts, N; Shuster, N.
RHODE ISLAND
Democrats: Kennedy, Y; Langevin, Y.
SOUTH CAROLINA
Democrats: Clyburn, Y; Spratt, Y.
Republicans: Barrett, N; Brown, N; Inglis, N; Wilson, N.
SOUTH DAKOTA
Democrats: Herseth Sandlin, Y.
TENNESSEE
Democrats: Cohen, Y; Cooper, Y; Davis, Lincoln, Y; Gordon, Y; Tanner, Y.
Republicans: Blackburn, N; Davis, David, N; Duncan, N; Wamp, N.
TEXAS
Democrats: Cuellar, Y; Doggett, Y; Edwards, Y; Gonzalez, Y; Green, Al, Y; Green, Gene, Y; Hinojosa, Y; Jackson-Lee, Y; Johnson, E. B., Y; Lampson, Y; Ortiz, Y; Reyes, Y; Rodriguez, Y.
Republicans: Barton, N; Brady, N; Burgess, N; Carter, N; Conaway, N; Culberson, N; Gohmert, N; Granger, N; Hall, N; Hensarling, N; Johnson, Sam, N; Marchant, N; McCaul, N; Neugebauer, N; Paul, X; Poe, N; Sessions, N; Smith, N; Thornberry, N.
UTAH
Democrats: Matheson, Y.
Republicans: Bishop, N; Cannon, N.
VERMONT
Democrats: Welch, Y.
VIRGINIA
Democrats: Boucher, Y; Moran, Y; Scott, Y.
Republicans: Cantor, N; Davis, Tom, N; Drake, N; Forbes, N; Goode, N; Goodlatte, N; Wolf, Y.
WASHINGTON
Democrats: Baird, Y; Dicks, Y; Inslee, Y; Larsen, Y; McDermott, Y; Smith, Y.
Republicans: Hastings, N; McMorris Rodgers, N; Reichert, Y.
WEST VIRGINIA
Democrats: Mollohan, Y; Rahall, Y.
Republicans: Capito, Y.
WISCONSIN
Democrats: Baldwin, Y; Kagen, Y; Kind, Y; Moore, Y; Obey, Y.
Republicans: Petri, N; Ryan, N; Sensenbrenner, N.
WYOMING
Republicans: Cubin, X.
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