Foreclosure prevention bills pass Iowa Senate - KWWL - Eastern Iowa Breaking News, Weather, Closings

Foreclosure prevention bills pass Iowa Senate

DES MOINES (KWWL) -- Two bills aimed at keeping more Iowans in their homes passed the Iowa Senate Tuesday.

The first bill requires lenders to provide mediation and counseling service information to homeowners before starting foreclosure proceedings.  The second creates stricter rules for mortgage bankers and brokers, including more training and background checks.

"This is one of the most important bills that we will pass this year to deal with the current economic situation," said Senator Rob Hogg of Cedar Rapids.  "It provides Iowans who are behind on their mortgage with a better opportunity to work it out with their lenders." 

"The bad actors in this industry made loans without fully disclosing the terms. They made loans at sky-high interest rates that made foreclosure inevitable," said Senator Swati Dandekar of Marion, floor manager of SF 355.  "They made risky loans for more than the value of the home and then sold that loan to mortgage brokers. Senate File 355 will toughen state laws governing mortgage bankers and brokers to fight shady operators who helped cause the national mortgage mess."

Iowa's home foreclosure rate hit a 10 year high last year. More than 30,000 mortgages were delinquent or in foreclosure in the last quarter of 2008, according to the Mortgage Bankers Association. 

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