March 11, 2005
New Bill Expands Homeowners' Protection Against Predatory Lending
On Wednesday March 9 Rep. Brad Miller, Rep. Mel Watt and Rep. Barney Frank introduced a bill that would protect homeowners from predatory lenders significantly better than current federal law. Modeled after North Carolina's successful anti-predatory lending law, the bill would eliminate existing loopholes in federal law.
The bill includes provisions that would:
Discourage lenders from charging exorbitant fees or prepayment penalties
Require a borrower to receive homeownership counseling prior to taking out a high cost loan
Ban mandatory arbitration clauses
Prevent all mortgage originators from disguising fees to evade HOEPA protections
Bar lenders from making loans without considering the borrowers' ability to repay
Predatory lenders rob homeowners of more than $9 billion a year. Abusive loan terms and lending practices have not only limited the wealth-building potential for homeownership, but have led families to lose their homes through foreclosure and their accumulated life savings. These predatory lenders target the most vulnerable: the elderly, immigrants, and minorities.
The bill will broaden protections found in states with strong predatory lending laws to the whole country. States have found a way to maintain a fair and viable market where credit is available to borrowers in a responsible manner. The Center for Responsible Lending urges Congress to enact the Miller-Watt bill so that all Americans can benefit from protection against predatory loan practices. For more information on the bill please visit our website.
About the Center
The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.
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