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

Comments to the Federal Reserve Board re Truth in Lending – Interim Rule Requiring Notice to Consumers by Owners of Mortgage Loans, January 19, 2010 PDF 110KB

Comments to the Federal Reserve Board regarding its proposed Truth in Lending (TILA) rules for closed end and open-end mortgage credit, December 24, 2009:

Docket No. R-1366 PDF 2MB

Docket No. R-1367 PDF 2MB

Press Release and Report: Subprime Revisited: How the Rise of the Reverse Mortgage Lending Industry Puts Older Homeowners at Risk, October 2009 PDF

Comments to the Federal Trade Commission regarding Advance Notice of Proposed Rulemaking: Mortgage Acts and Practices Rulemaking, July 31, 2009 PDF 1.5MB

Letter supporting amendments to H.R. 1728, May 7, 2009 PDF 61KB

Consumer Voices in the Great Mortgage Crash

An interactive presentation that includes videotaped interviews with victims of predatory mortgage lending as well as information, analysis and explanation of an unfolding crisis

Stop Predatory Lending: A Guide for Legal Advocates 

Letter supporting Senator Boxer's Amendment Requiring New Owners of Loans Provide Essential Information to Homeowners, May 4, 2009 PDF 61KB

Press Release and Testimony: Mortgage Reform and Anti-Predatory Lending Act House Financial Services Committee (HR 1728), April 23, 2009 PDF

Coalition Letter not in support of H.R. 1728, May 5, 2009 PDF 41KB

Testimony of Margot Saunders on HR 1728: Mortgage Reform and Anti-Predatory Lending Act, House Financial Services Committee, April 23, 2009 PDF 258KB

Coalition Letter detailing concerns about H.R. 1728 - Mortgage Reform and Anti-Predatory Lending Act, April 7, 2009 PDF 29KB

Testimony: Mortgage Lending Reform: A Comprehensive Review of the Current Mortgage System, March 11, 2009 PDF 198KB

Comments to the Federal Reserve Board Regarding Proposed Regulations under the Mortgage Disclosure Improvement Act, February 9, 2009 PDF 189KB

Consumer Group Letter to President-Elect Obama, December 1, 2008 PDF 22KB

Letter Supporting Loan Modifications in Bankruptcy, November 18, 2008 PDF 140KB

Summary Analysis - HUD Final RESPA Rule, December 5, 2008 PDF 51KB

The FRB’s Final HOEPA Rule: A First Step, But Real Reforms Are Still Needed Summary Analysis, November 13, 2008 PDF 26KB

Letter to HUD and OMB on HUD RESPA rule, October 31, 2008 PDF 16KB

Failed Regulatory Policy, Not Low Income Housing, Cause of Mortgage Crisis, October 13, 2008 PDF 38KB

NCLC Testimony on the Implementation of the HOPE for Homeowners Program and a Review of Foreclosure Mitigation Efforts, September 17, 2008 PDF 171KB

Press Release: Civil Rights and Consumer Groups Respond to Takeover of Fannie Mae and Freddie Mac, September 15, 2008 PDF 418KB

Letter Opposing Bond's Amendment, June 19, 2008 PDF 8KB

Coalition Letter on Senate Housing Package, June 19, 2008 PDF 75KB

Coalition Letter opposing a proposal (HR 6254) to relax FHA’s certification rules to
permit more mortgage brokers instant access to the FHA loan program, June 16, 2008 PDF 66KB

Comments on Real Estate Settlement Procedures Act (RESPA) Proposed Rule to Simplify and Improve the Process of Obtaining Mortgages to Reduce Settlement Costs to Consumers, June 16 2008 PDF 330KB

Support Letter: Homeowners Still Need Protection From Tax Consequences of Modification of Mortgages , May 30, 2008 PDF 51KB

Support Letter for the Federal Foreclosure Deferment Bill, May 20, 2008 PDF 20KB

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

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

Policy Analysis Archive (1995-2007)