Predatory Mortgage Lending

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

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

Stop Predatory Lending: A Guide for Legal Advocates 

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

Coalition Letter to House Financial Services Committee on Predatory Mortgage Lending, January 31, 2007, PDF 26KB

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

Comments to Federal Bank Regulators on Proposed Illustrations Regarding Non-Traditional Mortgages, November 28, 2006

Testimony by National Consumer Law Center and Consumer Federation of America Regarding Non-Traditional Mortgage Products, September 20, 2006, PDF 232KB

Comments to the Federal Reserve Board regarding Home Equity Lending Market, August 15, 2006, PDF 297KB

Letter to the Appropriations Committee re markup of the HUD Appropriations bill, July 17, 2006

Testimony of J. Robert Hunter before the House Committee on Financial Services Subcommittee regarding Title Insurance Cost and Competition, April 26, 2006, PDF 466KB

Letter commenting on RESPA reform, April 6, 2006, PDF 112KB

Comments: to the federal banking regulators regarding nontraditional mortgages, March 29, 2006, PDF 44KB

Policy Analysis Archive (2000-2005)