The most comprehensive legislative response to the subprime crisis emerged on Thursday as the House of Representatives passed a bipartisan bill imposing liability on companies that package mortgages into securities and setting new standards for mortgage origination reports the Financial Times.

The House move comes as leading Democrats are pressing ahead with efforts to tackle predatory mortgage lending, seen by some as the root of the problem.

Lack of a federal system of oversight for mortgage brokers also has been blamed for lax lending and disclosure standards, leading to what Barney Frank, chairman of the House financial services committee, has called “irresponsible” lending practices.

The House bill, crafted by Mr Frank and Spencer Bachus, an Alabama Republican, passed by a vote of 291-127. The White House has expressed concerns about the bill but has stopped short of threatening a veto.

The bill would create a licensing system for residential mortgage loan originators, and establish a minimum standard requiring that borrowers have a “reasonable ability” to repay a loan.

It also contains an “anti-steering” provision that would prohibit mortgage originators from steering consumers to a loan that the consumer lacked “a reasonable ability to repay” or had “predatory characteristics”.

Read it here: Congress tackles subprime crisis