House panel endorses mortgage reform package

WASHINGTON (Reuters) - The House of Representatives Financial Services Committee voted on Tuesday to create new consumer protection standards in the mortgage industry, which critics say dangerously eased lending standards during the recent housing boom.

Rep. Barney Frank, the Democratic chairman who drafted the bill, said his legislation will give mortgage investors some responsibility for improper loans that go bad and eliminate some broker incentives that could lead borrowers to costlier loans.

"I think we have a national crisis to which we have to respond. In this case, I think it is important that we get a bill that makes significant improvements and can get signed into law," Frank said.

Frank, of Massachusetts, watered down some provisions of his bill in order to win support of key Republicans and so improve chances that the bill will become law.

The final vote was 45 members in favor and 19 members against.

(Reporting by Patrick Rucker; editing by Andrea Ricci, Gary Hill)