A federal bill that cracks down on predatory lending and enforces new liabilities on investors that securitize home loans, has been met with mixed reaction from industry insiders.

"The Mortgage Reform and Anti-Predatory Lending Act of 2007", sponsored by Reps. Brad Miller (D-N.C.), Mel Watt (D-N.C.) and Barney Frank (D-MA), will create a federal duty of care, prohibit steering and call for the licensing of mortgage originators, including brokers and bank loan officers. The bill will also set a minimum standard for all mortgages, requiring that borrowers have a reasonable ability to repay as well as expand and enhance protection for borrowers of high-cost loans under the "Home Owner and Equity Protection Act." The bill will also attach limited liability to securitizers that package and sell investment vehicles tied to mortgage loans. Investors themselves would not be held liable.

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