Since the last review of the Home Ownership and Equity Protection Act (HOEPA) by the Federal Reserve Board, the home mortgage market has changed considerably. Subprime lending has become a dominant force, unregulated mortgage brokers now originate a large part of the mortgages, and exotic mortgages with exploding interest rates have become a common occurrence.
Motivated by financial incentives, predatory lenders confront consumers with unaffordable mortgages and charge fees and interest rates well beyond the level necessary to cover risk. Borrowers are steered into unsuitable products and not presented with the better options for which they qualify. Inflated appraisals remove equity from borrowers’ homes, and loan servicers charge unnecessary fees which can push borrowers towards foreclosure.
NCRC leads the movement for a strong national anti-predatory lending law, which will provide the best protection for all consumers and promote homeownership sustainability. The following guide us in that effort:
- Strong consumer protections that improve upon existing state and federal laws
- Codification of existing industry best practices, GSE guidance, and practices outlined in the Attorney General settlements
- Protections that hold the secondary market accountable for screening out predatory loans
- A comprehensive national anti-predatory lending bill