House supports broad mortgage meltdown response

By Kevin Drawbaugh

WASHINGTON (Reuters) - The House of Representatives voted on Thursday to regulate mortgage officers for the first time and take other steps to try to avert another housing finance crisis like the one now shaking world markets.

By a 291-127 vote, the House approved a bill targeting loose and deceptive loan practices that helped inflate the recent housing bubble. It calls for licensing of mortgage brokers and bank loan officers, bans certain predatory lending practices and bolsters borrower protections.

No equivalent bill has been introduced in the Senate.

The Bush administration said on Wednesday it supports some parts of the House bill, opposes others and "looks forward to working with Congress." It has not threatened a veto.

The House bill is a wide-ranging attempt to respond to a crisis that analysts have estimated could cost banks and investors $480 billion in coming years, while threatening many Americans with the loss of their homes.

House Majority Leader Steny Hoyer said, "Increasing loan rates on subprime mortgages have left thousands of American families close to foreclosure, and this crisis has led to the worst slump in the housing market in 16 years."

The Maryland Democrat said the House bill "will make sure that consumers only get loans that they are able to repay, and that they are protected from reckless lending practices."

Final action by Congress may be months away.