A pair of bills aimed at alleviating mortgage problems by Iowa homeowners, including a bill that aims to put a halt to predatory-lending practices, were approved by the Iowa Senate unanimously this week.

"The bad actors in this industry made loans without fully disclosing the terms," Senator Swati Dandekar (D-Marion) said. "They made loans at sky-high insurance rates that made foreclosure inevitable. These practices put the homes of thousands of Iowa families at risk. This financial disaster helped kick off the deepening national recession."

Senate File 355 states that "the bill's provisions are directed at protecting consumers and ensuring that the mortgage lending industry is operating without unfair, deceptive, or fraudulent practices on the part of mortgage loan originators."

"Security of a family's home is something all Iowa families understand," Dandekar said. "That's one reason why owning your own home is such an important goal for so many families. That strong desire to own a home can make Iowans vulnerable to predatory or incompetent lenders."

The bill prohibits an individual from making a mortgage loan without first becoming licensed. Doing so would be a class "D" felony punishable by up to five years in prison and up to a $7,500 fine.

Senator Rob Hogg (D-Cedar Rapids) said he believes the second mortgage-related bill approved by the Senate will be one of the most important bills this session dealing with the current economic situation. Senate File 364 was later approved by the House and sent to the governor.

"It's a bill that is fundamentally about Iowans who are facing foreclosure," Hogg said. "For those that are behind on their mortgage, it provides them with an opportunity to work it out voluntarily with their lenders."

Hogg said that in December 2008 nearly 900 properties in the state were subject to foreclosure. The bill requires a mediation notice before a foreclosure action when a residential property is involved.

The bill also expands the options for allowing postponements of a sheriff's sale and extends the number of allowable postponements from two of not more than three days each to two postponements not to exceed a total of 60 days.