Kanjorski Unveils Servicing, Appraisal Bill

Rep. Paul Kanjorski, D-Pa., has introduced a mortgage servicing and appraisal reform bill that he plans to attach to a comprehensive predatory lending bill the House Financial Services Committee is expected to mark up this fall."This bill helps to protect consumers by improving mortgage servicing, enhancing appraisal quality and standards, ensuring better appraisal oversight, and requiring escrows for those mortgages where borrowers are more likely to experience difficulty in budgeting for the often substantial cost of taxes and insurance," Rep. Kanjorski said. The second-ranking Democrat on the Financial Services Committee has been working on servicing and appraisal reforms for several years as a result of a major developer scam in his Pennsylvania district that led to scores of foreclosures. One aim of the bill (H.R. 3837) is to address the lack of escrow accounts on subprime loans. Lenders would be required to provide an estimate of taxes and insurance when borrowers apply for a mortgage so that they understand the annual costs if they opt out of establishing an escrow account at closing. The bill also attempts to shield appraisers from lender pressure and updates the Real Estate Settlement Procedures Act to create new servicing protections for consumers and increases penalties for violations.