SB 1149 North Carolina's Predatory Mortgage Lending Law

SB 1149 Celebrating Over 6 Years of Success

 Full Text of the Law
 Short Summary of SB 1149
 Full Summary of SB 1149

In 1999, North Carolina became the first state to enact legislation to curb predatory mortgage lending. Over the many years since, the North Carolina law has proven its effectiveness in curtailing predatory lending while preserving a robust subprime lending market.

During the first year after the law's passage, North Carolina's citizens saved an estimated $100 million as a result of the law. The law did not increase interest rates on subprime loans in N.C, and subprime lending continues to grow in the state (up an estimated 40% this year).

Abusive home lending practices, particularly among subprime mortgage refinances, cost U.S. consumers an estimated $9.1 billion every year. The North Carolina experience can be a model for reining in predatory lending. Any effective legislation must achieve these goals:

  • Limit predatory practices and fees: abusive prepayment penalties that trap subprime borrowers in high-cost loans; kickbacks to brokers that encourage steering; and the financing of excessive fees.
  • Prevent "flipping," abusive refinances that do nothing more than generate fees while stripping homeowners’ wealth.
  • Ensure homeowners have a right to pursue meaningful remedies and defend their homes against foreclosure even after their loans have been sold.

Learn More About the NC Law

 Assessing the Impact of North Carolina's Predatory Lending Law
Housing Policy Debate, 2004
Revised version of the 2003 UNC CCC study (below)

 The Impact of North Carolina's Anti-Predatory Lending Law: A Descriptive Assessment
UNC Center for Community Capitalism, 6/2003

N.C. Predatory Lending Law Saves Borrowers $100 Million, Does Not Hurt Low-Income Credit Availability
Center for Responsible Lending, 8/2002

Comparison of Two Studies about the NC Law: CRL and the Credit Research Center
Center for Responsible Lending

FAQs about the North Carolina Predatory Mortgage Lending Law