This article was first published in The Wall Street Journal,
November 10, 2007; Page A10
The Mortgage Reform and Anti-Predatory Lending Act was
approved by the House Financial Services Committee last week
and has been sent to the floor for a vote. This piece of
legislation is intended to overhaul mortgage lending and
legislate our way out of the subprime mortgage crisis.
Unfortunately, like most actions taken in the immediate
aftermath of a high-profile event, the bill should not become
law. It is fraught with peril to the housing and credit
markets, and it will not help low-income housing
purchasers.
Take, for example, the "federal duty of care" that
the bill imposes on mortgage lenders. Explaining what this duty
amounts to will, without a doubt, require hundreds of pages of
complex regulations that few lenders and their employees will
understand -- but nevertheless be in jeopardy for failing to
