House votes to outlaw ‘liar loans’
WASHINGTON — The House has voted to outlaw so-called liar loans, ballooning mortgage payments and other bank practices that lawmakers say prey on consumers.
The proposal is one of several Democrats are pushing to tighten controls on an industry that critics say helped undermine the economy by underwriting risky loans then passing them off to investors. The bill requires banks to verify a person’s credit history and income and make a good-faith effort to determine whether the person can repay the money.
Many Republicans oppose the bill, saying it would limit consumers’ options and make it tougher to get credit.