The legislation of the Democratic-led Committee on Financial Services to address the problems of predatory mortgage lending will be drafted with several key principles in mind:

All Americans should be protected against predatory lenders. We will put the
best ideas and protections to work for every mortgage borrower, regardless of
where they live or what institution they borrow from.

Consumers should get "good credit." The best thing we can do for consumers
currently in bad loans - and for future borrowers - is ensure that they can get
good loans. The promise of homeownership is empty if the result is foreclosure
or equity being stripped from borrowers who are sold loans they cannot pay for.
 

Credit availability must be preserved, especially in a troubled market. We will
take a measured approach that cracks down on abusive lending but preserves a
robust system that boosts sustainable homeownership.
 

Lenders should not make loans that they know the consumer cannot pay back
or that exceed the value of the home. This seems simple - why would lenders
ever make such loans? Unfortunately a number have, and consumers and
communities bear the results. We will implement standards that help ensure
lender and consumer interests are aligned, and that result in good loans and
financially healthy borrowers.
 

Consumers should get a simple, understandable, and meaningful disclosure of
their loans' terms. Mortgage originators should provide clear and understandable
disclosures of all key terms to all borrowers. Too many crucial facts are currently
buried in legalese or cloudy verbal descriptions, and some consumers cannot tell
for certain what they are signing up for.
 

Mortgage originators should not have incentives to steer consumers into bad
loans. Borrowers should be assured that they receive a loan at the best terms they
qualify for - financial and other incentives for those who originate mortgages
should serve that goal.
 

We can not return to redlining. We will remember that before predatory lending
provided too much bad credit, many communities had little access to credit at all.
We must end discriminatory lending practices.