AUGUSTA, Maine — The governor of Maine is expected to sign a bill into law that tightens requirements in order to promote responsible subprime mortgage lending.

The Maine House and Senate unanimously passed the legislation last week. "With the rampant foreclosures in the subprime market, policy leaders and responsible lenders in Maine understood the pressing need to act," Uriah King, co-author of a report that documented predatory lending abuses in Maine with the Center for Responsible Lending, said. "This law includes some of the strongest protections in the country, including common-sense ways to reduce broker abuses and destructive serial refinancing."

The new law includes a key provision that requires lenders to evaluate a borrower's ability to repay the loan and will require brokers to recommend mortgages that make sense for the borrower, while prohibiting lenders from financing points and fees in high-cost mortgages–a practice that makes it easy to strip equity from homeowners while hiding the true cost of the loan.

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