Industry News

California coalition to speak out against predatory lending

Group will testify before Federal Reserve Board

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A coalition of California groups plans to testify during a Federal Reserve Board of Governors meeting this week about the dangers of predatory mortgage lending, according to an announcement. Among the existing problems in the industry, cited by the coalition: many borrowers are sold loans based on a stated income, with no documentation to show the borrowers are able to afford the loan; borrowers are sold loans with low initial rates that will drastically increase in the coming years and could leave unsuspecting borrowers unable to pay their mortgages; loans are sold to non-English speakers who don't understand the documents they sign for the loan; borrowers of color are much more likely to get stuck with overpriced loans; and seniors are in some cases targeted for equity-stripping scams. To combat predatory lending practices, members of the California Reinvestment Coalition will urge the Federal Reserve Board to: Include more overpriced loans within the protections of the Home Owne...