WASHINGTON -- Here’s how area members of Congress voted in the week ending May 8.



HOUSE



PREDATORY HOME LENDING: Voting 300 for and 114 against, the House on May 7 passed a bill (HR 1728) to outlaw practices associated with subprime loans and the U.S. housing meltdown. The bill requires lenders to keep a financial stake in loans they sell into the securities market; assigns legal liability to those who originate and securitize mortgages; bars loans to borrowers who show “no reasonable ability” to pay, and outlaws refinancings aimed mainly at generating fees for the lending industry.



The bill prohibits early-repayment penalties designed to trap borrowers in bad mortgages; excessive late-payment penalties; requirements that borrowers waive their right to sue lenders, and the issuance of single-premium credit insurance. The bill also sets federal standards for property appraisals and bans the steering of borrowers into subprime loans when they qualify for conventional mortgages.



Additionally, the bill authorizes Department of Housing and Urban Development grants for credit counseling and state and local programs to educate low-income borrowers on obtaining home loans and averting foreclosures.



Brad Miller, D-N.C., said: “The mortgages that got us in this mess were shameful. It is shameful that this Congress, that this government, ever allowed those mortgages to happen. This bill will begin to put an end to it, to make sure it never happens again.”



Jeb Hensarling, R-Texas, said the bill would “ensure that consumers lose their choices. It will make interest more expensive. It will protect...people out of their homes and effectively take away the American dream....We shouldn’t force people who are struggling to pay their own mortgages to pay their neighbors’ as well.”



A yes vote was to pass the bill.



MASSACHUSETTS Voting yes: John Olver, D-1, Richard

Neal, D-2, James McGovern, D-3, Barney Frank,

D-4, Niki Tsongas, D-5, John Tierney, D-6, Edward

Markey, D-7, Michael Capuano, D-8, Stephen Lynch,

D-9, William Delahunt, D-10



Voting no: None



Not voting: None



MORTGAGE-BACKED SECURITIES: The House on May 7 rejected, 171 for and 252 against, an amendment to strip HR 1728 (above) of its legal liability for third parties who convert home loans into mortgage-backed securities.



Jeb Hensarling, R-Texas, called the provision “a plaintiff’s lawyer’s dream, and so we will have an explosion of liability exposure. Why would people want to invest? Why would people want to securitize?”



Melvin Watt, D-N.C., said that if the amendment were adopted, “We will be right back where we are right now because nobody in the chain of custody of that loan, other than the original lender, will have any liability.”



A yes vote backed the amendment.



MASSACHUSETTS Voting yes: None



Voting no: Olver, Neal (MA), McGovern, Frank

(MA), Tsongas, Tierney, Markey (MA), Capuano,

Lynch, Delahunt



Not voting: None



FINANCIAL CRIMES: Voting 367 for and 59 against, the House on May 6 passed a bill (S 386) toughening federal laws against mortgage and securities fraud and nearly doubling federal personnel for investigating and prosecuting financial crimes. The bill also would establish a commission of six Democratic appointees and four Republican appointees, armed with subpoena power, to investigate the ongoing economic crisis and recommend preventive steps.



The bill stipulates that money-laundering statutes cover “proceeds” rather than just “profits;” expands the definition of “financial institution” covered by fraud and money-laundering statutes to include mortgage lenders; authorizes $490 million over two years for hiring 700 FBI agents, prosecutors and forensic analysts to address white-collar fraud, and bolsters protections against fraud in stimulus spending and the Troubled Assets Relief Program (TARP).



Additionally, the bill broadens the False Claims Act, under which private citizens can file fraud suits on behalf of the government and receive a large share of any recovered funds.



Judy Biggert, R-Ill., said: “Fighting fraud must play a central role in solving the underlying problems that have undermined economic recovery.”



Michael Burgess, R-Texas, objected to Democrats getting majority control of the new commission when “there is just as much guilt on one side of the aisle (for the crisis) as there is on the other.”



A yes vote was to send the bill to a House-Senate conference.



MASSACHUSETTS Voting yes: Olver, Neal (MA),

McGovern, Frank (MA), Tsongas, Tierney, Markey

(MA), Capuano, Lynch, Delahunt



Voting no: None



Not voting: None



SENATE



AT-RISK HOMEOWNERS: Voting 91 for and five against, the Senate on May 6 passed a bill (S 896) revamping the 2008 Hope for Homeowners Program, which encourages lenders to refinance at-risk mortgages into 30-year, fixed-interest loans in return for Federal Housing Administration backing of the new loans. The program has fallen far short of its goal of stabilizing hundreds of thousands of mortgages headed for default.



This bill softens eligibility terms for borrowers and increases federal incentives for lenders, with $2.3 billion of its cost covered by the $700 billion Troubled Assets Relief Program (TARP). The bill also extends current FDIC insurance on bank deposits to $250,000 per person per institution through 2013.



Christopher Dodd, D-Conn., called the bill needed because “3.4 million homes are expected to go into foreclosure this year” and “between eight and 12 million homeowners over the next several years....breathtaking numbers when you consider the damage to families, to neighborhoods and to communities....”



David Vitter, R-La., said: “Rather than... heap more burdens and more requirements and more need for more money on the Federal Housing Administration...we should put in place some basic protections to the solvency of the FHA.”



A yes vote was to send the bill to House-Senate negotiations.



MASSACHUSETTS Voting yes: John Kerry, D



Voting no: None



Not voting: Edward Kennedy, D



BANK STOCK DISPUTE: Voting 36 for and 59 against, the Senate on May 5 refused to bar the Troubled Assets Relief Program (TARP) from converting its holdings in U.S. banks to common stock. The amendment to S 896 (above) concerned a Treasury plan to convert preferred stock, the equivalent of a loan, to common stock, which is equity. Backers say this would give banks capital for lubricating the economy, while foes call it a dangerous step toward nationalizing banks.



Jim DeMint, R-S.C., said: “We are at the point where all...these private companies out there are going to be owned, in part, by the federal government.”



Christopher Dodd, D-Conn., said: “This is not about the government taking over” because “as soon as the moment is appropriate we are going to be selling this off and getting out of it as fast as we can.”



A yes vote backed the amendment.



MASSACHUSETTS Voting yes: None



Voting no: Kerry



Not voting: Kennedy



FORECLOSED RENTERS: Voting 57 for and 39 against, the Senate on May 6 amended S 896 (above) to prevent the immediate eviction of renters from foreclosed properties. Tenants in multi-unit buildings could remain until their leases expire and tenants in residential homes would be allowed 90 days to relocate.



John Kerry, D-Mass., said the amendment would benefit “low- to moderate-income folks in America...from being just booted out on the street....”



Richard Shelby, R-Ala., said: “This is not a good proposal. This ...will cause all kinds of problems. Once a property is foreclosed, what do you do with it next?”



A yes vote was to adopt the amendment.