Posted by:
Steve Dubb
Advocacy group launches site on mortgage crisis
The Community Investment Network a project of the National Community Reinvestment Coalition, has launched a web portal called Subprime Spotlight.
The website includes a useful definition of “predatory lending” and carefully distinguishes it from sub-prime lending per se. As the website notes, “Sub-prime loans are not necessarily by their nature ‘predatory,’ but these types of loans do provide ample opportunities for dishonest and greedy mortgage lenders and mortgage brokers to exploit vulnerable borrowers.”
As the website outlines, a mortgage becomes “predatory” when it has one or more of the following features:
* Lender charges more in interest and fees than is required to cover any “added risk” of lending to borrowers with credit imperfections or past credit problems;
* Contains abusive terms and conditions that trap borrowers and lead to a spiral of increased indebtedness (in effect, “stripping” assets and wealth from the borrower);
* Fails to take into account the borrower’s ability to repay the loan, and/or history of paying bills on time, especially rent payments; and
* Violates fair lending laws by targeting women, minorities and communities of color with predatory practices.
In addition to this basic introduction, the Subprime Spotlight section focuses on news, proposals, plans, programs, efforts of advocacy groups (including the National Community Reinvestment Coalition whose homepage also has considerable information on advocacy efforts and legislative proposals in Congress), efforts by coalition member organizations, statements by elected officials, regulatory agency efforts, and the mortgage industry efforts to address the growing foreclosure crisis.