Hearing May Be Held for Bill with Subprime Restriction

The House Financial Services Committee might hold a hearing before it moves to mark up and vote on a major regulatory bill that would restrict subprime mortgage lending and lender compensation. Committee chairman Barney Frank, D-Mass., was expected to move quickly on the bill shortly after Congress returns from a two-week break on April 20. But committee deputy chief counsel Gail Laster said a meeting to hear testimony from interested parties is under consideration, although chairman Frank has not made a decision yet. As introduced, the mortgage regulatory bill (H.R. 1728) restricts yield spread premiums and mortgage bankers are concerned it could also ban servicing release premiums. "We are well aware of this issue," Ms. Laster told a Washington meeting of the Real Estate Services Providers Council. Mortgage lenders also want the bill changed so that Federal Housing Administration and Department of Veterans Affairs guaranteed mortgages are treated favorably like prime mortgages.