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Press Releases

September 20, 2008
The government plan announced by Treasury Secretary Paulson and Fed Chairman Bernanke fails to deal with the root cause of the crisis---families in foreclosure----and instead is purely and simply a bailout of the lenders who created this disaster. The bailout will not solve our economic problems because it will do virtually nothing to stop the foreclosure epidemic. Continuing foreclosures will drag down the economy even further. A truly comprehensive plan must also benefit ordinary, hard-working Americans, the ones who already are bearing the brunt of Wall Street's excesses. If it doesn't...
September 15, 2008
Merrill Lynch and Lehman Brothers are the latest corporate casualties in the financial crisis caused by abusive loans from reckless lenders. Even the former chair of the Mortgage Bankers Association now concedes that brokers, lenders and investors "forgot about [their] customers" because "making money and our commission checks were more important." In short, these loans never should have been made. The failure of Lehman and forced sale of Merrill underscore the need for stronger regulation of the mortgage market to prevent this from recurring, and, if we want to fix the economy, the need...
September 11, 2008
The preliminary report issued today by Federal Reserve Board on mortgages made in 2007 suggests that troubling lending patterns of years past persisted, with Latino and African-American families continuing to receive a disproportionate share of high-cost, subprime home loans compared with non-Hispanic white families. Though the Center for Responsible Lending (CRL) has not finished a full analysis of the information, which the Fed collects under the Home Mortgage Disclosure Act (HMDA), an initial review shows that abusive lending patterns continued even though the number of higher-cost...
September 9, 2008
Today Martin Eakes, CEO of Self Help and the Center for Responsible Lending, issued the following statement in response to the government's decision to take control of Fannie Mae and Freddie Mac: "Avoiding foreclosures that don't need to happen is our country's best hope for economic recovery. Now that Fannie Mae and Freddie Mac have the full backing of the U.S. government, they have the flexibility required to implement mortgage modifications quickly, systematically and fairly. The need for meaningful, large-scale modifications is urgent; preventing foreclosures should be the test by...
August 27, 2008
Oakland—AB 1830, the California legislature's strongest piece of legislation designed to rein in the abuses in the mortgage market, passed the Senate today with a 21-16 vote. It must go back to the Assembly for concurrence before being sent to the governor. "The California Legislature has approved a bill with important, though limited, reforms this year," said Paul Leonard, director of the California office of the Center for Responsible Lending. "While it doesn't do everything needed to protect consumers going forward, it represents a positive step to help California borrowers and...
August 21, 2008
Today the entire staff of the Center for Responsible Lending joins the nation in mourning the passing of Representative Stephanie Tubbs Jones. Rep. Tubbs Jones was a courageous and effective advocate on many vital issues, including predatory lending. She recognized the terrible harm caused by reckless and unethical lending practices, and she stood up for more stringent protections for borrowers against abusive loans. With the loss of Rep. Tubbs Jones, our country is losing one of the strongest voices speaking out for economic opportunity for all. We will miss her. -
July 30, 2008
Today President Bush signed into law a housing bill passed by Congress aimed at stabilizing the shaky housing market. A key part of the housing bill will permit struggling homeowners to refinance their mortgages through the Federal Housing Administration—if their lenders and loan servicers agree. The Congressional Budget Office says this program could possibly help 400,000 homeowners, but because the program is voluntary for the loan servicers and lenders, the number of people that would actually avoid foreclosure is largely unknown. The new FHA program should be carefully...
July 25, 2008
Preventing millions of unnecessary foreclosures is important for all of us: the entire economy and every taxpayer. We're facing the wave of foreclosures today because reckless lenders for years mass-marketed bad loans. By the end of the bubble in 2006, six out of every 10 borrowers who got a subprime mortgages could have qualified for a lower-cost conventional loans. Who would knowingly sign a contract that would cost them tens of thousands of dollars more than necessary? The housing bill is a good step but even so will, at best, help about 500,000 families stay in their homes. That's...
July 14, 2008
(Revised July 23, 2008) Today the Federal Reserve helped return the home lending industry to common-sense business practices by issuing new rules for mortgage lenders. We are pleased to see that the Fed has adopted key protections for borrowers who receive subprime loans, including: Addressing the most substantial cause of current foreclosures, lenders must carefully evaluate a borrower's ability to repay a subprime loan, and verify the income used to do so; Lenders cannot impose abusive prepayment penalties that trap borrowers in short-term subprime ARMs; Lenders must escrow for...
July 11, 2008
While Washington continues to debate how to rein in the risky lending practices that fueled the foreclosure crisis, states are taking action. Earlier this week the North Carolina General Assembly became the first in the nation to ban "yield-spread premiums"—kickbacks that encourage brokers to overcharge—on subprime mortgages. These kickbacks, which brokers received for delivering subprime loans with higher interest rates than the lender had set, are one of the main reasons that subprime borrowers have typically paid thousands of dollars in unnecessary costs on brokered loans. "Consumers...

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