H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act, was designed to help ensure that lenders only make loans that borrowers will be able to repay. The House Financial Services Committee, which developed the bill, said the legislation would “curb lending that had been a major factor in the highest home foreclosure rate in the nation in 25 years . . . (and) establish a simple standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold.” This was a vote on a resolution or “rule” allowing the House to resume its consideration of the bill, and to permit fourteen amendments to be offered to it. Five of those fourteen would be offered by members of the Republican minority.

Rep. Cardoza (D-CA) began his statement in support by noting: “(M)any economists have correctly stated that the foreclosure crisis is the root of our economic meltdown, and . . . until the housing market is stabilized, the economy will continue to worsen . . .  .” He said that a similar mortgage crisis must never be permitted again and “(T)he (H.R. 1728) is one more step in that direction.”

Cardoza argued that “the foreclosure crisis can be traced back to the rapid increase in subprime mortgages and risky underwriting practices, most of which were made with no Federal supervision,” and that borrowers “were lured into low ‘teaser’ introductory interest rates which morphed into loans which they had little chance of repaying once rates increased, starting the uptick in the foreclosure market.  H.R. 1728 is aimed at preventing these predatory practices in the future.”

Rep. Manzullo (R-IL), speaking in opposition to the rule and the underlying bill, claimed that the additional costs for such things as appraisals necessitated by the bill would cost the mortgage banking industry nearly three billion dollars. He said this would be translated into additional “hidden costs” of $700 per loan to future borrowers. Manzullo argued noted that an amendment he had that would overcome much of this problem was not included among the fourteen amendments that would be made in order by a “yes” vote on the question of providing for further consideration of H.R. 1728. 

Rep. Sessions (R-TX), also speaking in opposition, claimed that not making in order amendments that Republican members wanted to offer prevents “the open, honest debate that has been promised by my Democrat colleagues time and time again.”

The resolution was approved by a vote of 247-174, along almost straight party lines. All 247 “ayes” votes were cast by Democrats.  One other Democrat and one hundred and seventy-three Republicans voted “nay”. As a result, the House was able to resume its deliberations of the Mortgage Reform and Anti-Predatory Lending Act and consider fourteen designated amendments to it.