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RALEIGH — Two local Congressman have authored a bill to curb subprime lending practices they say helped spark the meltdown in the U.S. mortgage market this year.

Democratic Reps. Brad Miller and Mel Watt, who represent parts of Greensboro, have pushed a bill that would curb high-fee, high-interest home loans for the past several years. Earlier measures failed in what was a Republican-controlled Congress.

This latest measure faces better prospects at the hands of Democratic leaders and now that predatory lending practices have been in the news for much of this year.

"We now have the highest foreclosure rate in 25 years and next year it is probably going to be as high as it has been since the Great Depression," Miller said during a phone interview Monday. "It's going to get very bad."

Massachusetts Democrat Barney Frank, chairman of the House Financial Service Committee, is also a sponsor of the measure. It is modeled in large part on North Carolina's predatory lending law.

Subprime loans are given to borrowers whose credit would not qualify them for a conventional home loan, either because of too much debt or because they don't make enough money to repay the loan.

Miller said there is a place for subprime lending to help people who might not otherwise be able to own a home. The new legislation, he said, takes aim at lenders who intentionally create loans that consumers can't repay either through excessive fees or interest rates that balloon.

"This bill represents a significant step forward to clean up and prevent a number of the questionable practices that, unfortunately, took hold in the mortgage lending industry in the last several years," Watt said in a written statement. "I hope the industry will embrace the changes and allow the bill to move forward quickly."

That seems unlikely.

In an interview given to Investor's Business Daily this month, Kurt Pfotenhauer, senior vice president for government affairs and public policy at the Mortgage Bankers Association, said his organization was skeptical of the bill, questioning whether it could curb the practices it purports to stop.

In a statement Monday, Pfotenhauer said, "The debate surrounding this bill will cut to the heart of finding the right balance between shielding consumers from predatory lending practices and protecting their access to affordable credit."

Industry leaders want the new law to establish a nationwide standard for subprime mortgage lending. The bill's authors say they don't want to pre-empt states from enacting their own laws with standards tougher than federal ones.

The mortgage lending crisis has gotten attention in large part because of its effect on stock markets. Many subprime mortgages were bundled and sold as securities. With default rates increasing, investors in those securities are losing out. The fallout from foreclosures has also prompted some banks to curb their lending, making loans hard to come by even for qualified borrowers.

"I've been irritated that so much of the coverage has been about the poor people who are invested in hedge funds," Miller said, referring to the high-risk, high-reward investments generally only available to wealthy Wall Street players. "I'm a little bit more concerned about the 2.2 million people who are going to lose their homes to foreclosure."

Contact Mark Binker at (919) 832-5549 or mbinker@news-record.com