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March 23, 2011
New research by the Center for Responsible Lending finds that banks and other loan servicers often foreclose when investors have more to gain from a loan modification. The study—"Fix or Evict? Loan Modifications Return More Value than Foreclosures"—also finds that the industry's poor track record on loan modifications can't be blamed on homeowners who re-default. The research involved running more than 1,500 simulations of the test used by loan servicers to determine whether to modify distressed mortgages or foreclose. CRL found that even with hypothetical re-default rates as high as 79%—...
March 18, 2011
REALTORS®, Homebuilders, consumer groups urge federal regulators to avoid arbitrarily high mortgage down payments, which would hurt the economy by unfairly and unnecessarily closing the door to home ownership for many middle-class families.http://qa.crl.w.lmdagency.net/research-publication/joint-letter-regulators-1 For more information: Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org; Ginna Green at (510) 379-5513 or ginna.green@responsiblelending.org; or Charlene Crowell at (919) 313-8523 or charlene.crowell@responsiblelending.org.
March 11, 2011
Responding to widespread evidence of improper accounting, unwarranted fees, false documentation, and arbitrary foreclosure decisions, the 50 state Attorneys General are crafting a long-overdue plan to hold the mortgage servicing industry accountable. The plan would address accusations that banks and servicers have engaged in illegal and negligent servicing practices that have been a continued drag on the U.S. housing market and economy. "When unnecessary foreclosures flood the market, taxpayers end up picking up the tab," said Mike Calhoun, president of CRL. "Loan servicers have...
March 4, 2011
Oakland, Calif.—California State Sen. Mark Leno (D-San Francisco) and Senate President pro Tem Darrell Steinberg (D-Sacramento) vowed at the end of last year's legislative session that they would not give up on trying to prevent wrongful foreclosures of California homeowners. Their 2010 bill, which would have put an end to banks' pursuing foreclosures while simultaneously considering loan modifications, passed the Senate but failed in the Assembly. This year's California Homeowner Protection Act (SB 729) retains the same major goal as last year's SB 1275: avoiding wrongful...
March 2, 2011
Even as 50,000 new foreclosures start every week, the House Financial Services Committee votes tomorrow on four bills to dismantle programs aimed at helping homeowners. Industry figures show that more households than ever are in some stage of foreclosure, with over five million mortgage holders now at risk of losing their homes. Avoiding unnecessary foreclosures and encouraging loan modifications will be key to economic recovery, as the nation is sorely missing the jobs and growth provided by a healthy housing market. Some say the continuing stream of failed mortgages shows that...
February 18, 2011
Washington, D.C. --- The latest figures from the Mortgage Bankers Association show that reported mortgage delinquency rates moved down slightly in fourth quarter 2010, but more than five million homeowners remain at risk of losing their home to foreclosure. The number of homeowners currently in some stage of the foreclosure process actually increased 5% from third quarter. Meanwhile, Hope Now data show that the number of completed loan modifications in 2010Q4 plummeted by 23% over the previous quarter. Only one loan modification is occurring for every 15 homeowners in need of...
February 11, 2011
  Related: Wall Street, Not Fannie Mae and Freddie Mac, Led the Toxic Market   While Fannie Mae and Freddie Mac need serious reform, we must get these reforms right. Among the Administration's several proposals, only one—the one that maintains a limited role for the GSEs—even has potential for ensuring all families have access to home loans and achieving stability in the housing market. Completely throwing out a mortgage finance system that worked well for decades carries enormous risks, including these: Loss of family wealth and less economic security. The...
January 27, 2011
The Financial Crisis Inquiry report rejects the notion that the financial crisis was inevitable. Instead, based on extensive evidence and 19 days of public hearings, the report points squarely at preventable actions and inactions by the "captains of finance and the public stewards of our financial system." Aided by oversight that was weak and permissive, the reckless practices of Wall Street dragged the entire economy down an irresponsible path, though other roads could have been taken. The good news is that the financial reform bill passed by Congress last summer provides strong tools to...
December 28, 2010
Washington, D.C.--- Proposed changes to home lending rules from the Federal Reserve Board not only exceed its authority, but could actually encourage predatory lending targeted at the elderly. In response to the flawed proposals, the Center for Responsible Lending, the National Consumer Law Center (on behalf of its low-income clients), the National Association of Consumer Advocates, the California Reinvestment Coalition, the National Fair Housing Alliance and others have urged the Federal Reserve Board to withdraw its proposed regulations under the Truth in Lending Act [Regulation Z;...
December 9, 2010
The Department of Justice $2 million settlement with PrimeLending spotlights serious problems on loans insured by the Federal Housing Administration (FHA). The case found inconsistent and abusive pricing on loans to African-American borrowers, revealing that it's far too easy for lenders making government-backed loans to overcharge home buyers. (For the DOJ announcement, go to http://bit.ly/gINlMk.) The FHA insures mortgages that meet specific risk criteria, but the rules on how much lenders can charge remain loose. The result is that equally qualified borrowers have been charged...

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