Los Angeles – U.S. Senator Dianne Feinstein (D-Calif.) and Los Angeles Mayor Antonio Villaraigosa today called for Congress to pass legislation to create national licensing and oversight standards for mortgage brokers and lenders. Mayor Villaraigosa also announced his endorsement of the legislation – the SAFE Mortgage Licensing Act -- introduced by Senators Feinstein and Mel Martinez (R-Fla.) in February.

The subprime mortgage brokerage and lending business is like peeling the skin of an onion,” Senator Feinstein said. “As you peel it back, you find that there are fraudulent and unethical practices. You find that often an individual’s financial qualifications to own a home are not verified. People are given mortgages they cannot afford. They are not informed about rate resets. And some are told that their taxes are included when they are not. Others, such as Patricia Simmons, who joined us today, find themselves paying huge commissions that are buried in hundreds of pages of documents.

“The fact is that there are bad actors in the mortgage lending and brokerage business. They must be stopped. The time has come for national licensing standards to replace the thin patchwork of state regulations.”

“Too many families across this nation have seen their dream of home ownership become a nightmare due to questionable lending practices that hurt consumers,” said Mayor Villaraigosa. “Los Angeles has been especially hard hit by the mortgage crisis, and it is time for Congress stand up for America’s working families by taking action to fix a broken system. I applaud Senator Feinstein for her pioneering efforts to increase oversight and accountability in the mortgage industry.”

The results have been devastating, especially in California: Last year, 481,392 California homes entered foreclosure – and 84,375 were repossessed by lenders. As many as 500,000 California homes could enter foreclosure in the next two years as interest rates reset.

Today, mortgage brokers and lenders are licensed by the states, leaving a thin patchwork of regulation. In the absence of uniform national standards, accountability has not kept pace with the increasing sophistication of the mortgage industry.

Washington, DC – U.S. Senators Dianne Feinstein (D-Calif.) and Mel Martinez (R-Fla.) today called for swift passage of their legislation to create national licensing and oversight standards for mortgage brokers and lenders.