Predatory Mortgage Lending

See also Foreclosure Prevention

Predatory mortgage lending is stripping billions of dollars in precious assets from low-income communities across the nation. Seeking to exploit vulnerable and unsophisticated borrowers, predatory lenders charge more in interest and fees than is required to cover the risk of making the loan. Unfortunately, many predatory practices are perfectly legal under the current regime of federal laws and most state laws.

The subprime lending market, where predatory lending primarily takes place, has exploded by 795 percent over the last decade, from a roughly $43 billion market in 1994 to a $385 billion market in 2003. Due in part to abusive terms and practices, the foreclosure rate for subprime loans is much higher than prime loans: 1 of every 12 subprime mortgages will go to foreclosure, compared to 1 in 100 for the prime market. According to a number of studies, predatory lending disproportionately affects minority homeowners and communities.

Policy Analysis

Coalition Letter on the GSE/Hope for Homeowners Legislation, May 14, 2008 PDF 90KB

Coalition Support Letter for Miller-LaTourette non-preemption amendment to H.R. 5830, May 6, 2008 PDF 10KB

Letter in Support of Counseling Amendment, April 24, 2008 PDF 8KB

Letter in Support of Amendment Providing Legal Assistance to Borrower’s Facing Foreclosure, April 24, 2008 PDF 8KB

Testimony before the US House of Representatives Subcommittee on Housing and Community Opportunity Regarding H.R. 5679, the Foreclosure Prevention and Sound Mortgage Servicing Act of 2008, April 16, 2008 PDF 225KB

Stop Predatory Lending: A Guide for Legal Advocates 

Comments of the Consumer Groups to the Board of Governors of the Federal Reserve System Regarding Proposed Regulations
Relating to Unfair Trade Practices In Connection with Mortgage Lending, April 8, 2008 PDF 1.99MB
Summary and Press Release

Sample Comments to the Federal Reserve Board on Unfair and Deceptive Mortgage Practices, April 7, 2008 (MS Word)

Joint Statement from Civil Rights, Consumer, & Housing Groups: Senate Throws Out Single Most Needed Step to Help Hundreds of Thousands of American Families Keep Their Homes, April 3, 2008 PDF 48KB

Coalition Letter in Support of H.R. 5679, the Foreclosure Prevention and Sound Mortgage Servicing Act of 2008, March 31, 2008 PDF 10KB

Analysis of H.R. 3915’s Preemption Rule, March 14, 2008 PDF 3.80MB

Coalition Letter in Support of S. 2452, January 22, 2008 PDF 31KB

Testimony before House Financial Services Committee regarding on Accelerating Loan Modifications, Improving Foreclosure Prevention, and Enhancing Enforcement, December 6, 2007 PDF 73KB

Testimony before the Subcommittee on Housing and Community Opportunity regarding Foreclosure Prevention and Intervention: The Importance of Loss Mitigation Strategies in Keeping Families in Their Homes, November 30, 2007 PDF 232KB

Letter to Governors regarding Early Disclosures for Non-purchase Money Loans, November 16, 2007 PDF 66KB

Letter by Coalition Opposing H.R. 3915, November 15, 2007 PDF 14KB

Analysis of H.R. 3915—as passed out of the House Financial Services Committee, November 13, 2007 PDF 19KB

Comments of the NCLC and NACA Regarding Advance Notice of Proposed Rulemaking Relating to Unfair or Deceptive Acts or Practices, November 6, 2007 PDF 528 KB

Comments regarding the Proposed Illustrations of Consumer Information for Subprime Mortgage Lending, October 15, 2007 PDF 113KB

Comments to the Board of Governors of the Federal Reserve System regarding the Board's Authority under HOEPA to Prohibit Unfair Acts or Practices in Connection with Mortgage Lending, August 15, 2007 PDF 1MB

Group Letter to Federal Reserve Board on HOEPA Authority, August 9, 2007 PDF 10KB

Letter supporting the Homeownership Protection and Enhancement Act (“HOPE Act”) of 2007, July 12, 2007 PDF 20KB

Comments to the Commonwealth of Massachusetts Office of the Attorney General regarding Mortgage Lenders and Mortgage Brokers, June 28, 2007 PDF 67KB

Letter Supporting Borrower’s Protection Act of 2007, June 25, 2007 PDF 13KB

Coalition Letter to House Financial Services Committee on Predatory Mortgage Lending, May 21, 2007 PDF 26KB

Comments to the Office of the Comptroller of the Currency to Federal Banking Regulators regarding Proposed Statement on Subprime Mortgage Lending, May 7, 2007 PDF 134KB

Letter to House Financial Services Committee Leaders Supporting Enhanced Lending Duties under FHA, May 1, 2007 PDF 10KB

Letter to Banking Regulators regarding the Guidance on Nontraditional Mortgage Product Risk, February 21, 2007 PDF 46KB

Letter to Senate Regarding Inclusion of Hybrid ARMs in Interagency Guidance on Non-Traditional Mortgages, February 5, 2007 PDF 61KB

Response to MBA Policy Paper on Suitability, February 1, 2007 PDF 14KB

Letter to the Financial Services Committee regarding the Accessibility of FHA Programs, January 22, 2007 PDF 25KB

Policy Analysis Archive (1995-2006)