Congressman Ellison Introduces Additional Mortgage Protection Legislation; Would Preserve and Extend Nonprofit Housing Services
Washington, D.C – April 22, 2010 – (RealEstateRama) — Congressman Keith Ellison (D-MN) introduced the Flexible Licensing Compliance for Nonprofit Housing Employees Act of 2010. This legislation would extend the time nonprofit housing employees have to comply with mortgage loan origination licensing requirements set forth in the Secure and Fair Enforcement Mortgage Licensing Act of 2008 (“SAFE Act”) to January 1, 2011.
Susan Haigh, President of Twin Cities Habitat for Humanity stated, “By introducing this legislation Congressman Ellison reduces barriers for housing counselors and advances our work to prevent foreclosures and the challenges foreclosures create for Minnesota families and communities. We know that sixty percent of Minnesota homeowners in default on their mortgage who work with a housing counselor are able to avert foreclosure. With this legislation Congressman Ellison reduces costly regulations that are a barrier to our work to prevent families from losing their homes.”
In the wake of the national foreclosure crisis, for-profit mortgage brokerage firms came under fire for issuing poorly vetted mortgages. As a result, Congress passed the SAFE Act to reduce fraud and increase transparency in mortgage lending practices. Under current law, states must pass laws by July 31, 2010 that requires a variety of housing professionals to obtain a mortgage loan origination license.
Congressman Ellison’s bill delays the enforcement of SAFE Act licensing requirements for employees of nonprofit housing agencies until 2011. Currently, HUD-approved nonprofit housing counseling agencies already receive training to provide foreclosure prevention services. However, the administrative and financial burdens of SAFE Act licensing could lead housing nonprofit agencies to greatly curtail services that seek to prevent foreclosure. Ellison’s bill will protect the limited resources of housing nonprofits so that they can continue to assist vulnerable homeowners.
“The U.S continues to experience a historic foreclosure and housing crisis. In fact, eight million homes are in the foreclosure pipeline and 27 million households reportedly owe more than their homes are worth. Adding these SAFE Act requirements without sensitivity to the limited resources of nonprofit housing agencies undermines their very mission,” stated the Fifth District Congressman. “Nonprofit housing agencies are at the forefront of mortgage loan modification counseling and provide low-interest loans to working families that find credit difficult to obtain,” Ellison added.
