Two reports by Harvard University academics conclude that a lack of uniform regulations allow independent mortgage lenders to operate with less oversight of their compliance with laws intended to prevent discriminatory and unfair lending practices The aggressive marketing of subprime mortgage loans during the housing boom confused or misled many consumers about the terms offered by non-bank lenders and mortgage brokers, the reports said. The use of incentives encouraged some mortgage brokers and loan officers to market more costly subprime products to less knowledgeable borrowers who lacked the ability to repay the loans, the reports found, with potentially disastrous consequences for poor and minority neighborhoods now being hit by foreclosures. The reports' recommendations include expanding federal guidelines for nontraditional "exotic" loans so that they apply not only to federally chartered banks but also to independent mortgage companies, and extending Community Reinvestment Act ...
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