Baker Bill Would Shield MBS Investors

Investors in subprime mortgage securities would be shielded from major liability caused by lender violations of predatory lending laws under a bill introduced by Rep. Richard Baker, R-La.The bill would prohibit class action lawsuits and limit awards in individual cases to the amount the borrower paid for the loan, plus reasonable attorney's fees. Rep. Baker indicated his intention to draft the bill at a recent House Financial Services Committee hearing. He called it a stopgap measure while Congress continues to work on a national lending standard that would pre-empt state predatory lending laws. The American Financial Services Association supports Rep. Baker's assignee liability bill. "We believe it will help ensure liquidity in the secondary market," AFSA spokeswoman Lynne Strang said. A consumer advocate called the bill "troublesome," but he had not seen the bill yet.