Melvin Watt: “this amendment, on its face, is very, very simple, although I expect there will be some controversy about it. The…”

“this amendment, on its face, is very, very simple, although I expect there will be some controversy about it. The amendment simply changes one word. The word is ``or.'' We change the word to ``and'' in the bill instead. You would think that would be noncontroversial, but let me get into the effect of that. Currently, if an assignee of a mortgage has policies and procedures not to buy subprime loans that do not meet safe harbor provisions that are in this bill, or if the assignee is willing to cure such loans, the assignee has no liability until you get to a foreclosure situation. That's very complicated, I understand; but that's what the bill provides. The effect of the amendment would be to require the assignee to have policies and procedures in place and do certain things and be willing to cure the loan to avoid being liable for rescission. That's important because if you give the option to an assignee of either curing or having policies and practices that are responsible in place, an assignee can then just treat the cure as a cost of doing business, and it becomes an ineffective choice.”