Press Releases
March 13, 2008
The housing, economic, and mortgage rescue proposal from House Financial Services Committee Chairman Barney Frank is extremely helpful and the Center for Responsible Lending commends him for taking a lead on this issue. His plan recognizes much more help is needed for victims of the subprime mess than is now available. While we welcome any and all plans that help even one more family keep a home, the Treasury Department's "Project Lifeline" has been largely inadequate. Treasury's reliance on voluntary efforts by lenders to help distressed homeowners has simply proved unworkable on a large...
March 13, 2008
We're glad the Administration finally recognizes that the subprime crisis was caused by reckless lenders who've been inadequately supervised by federal regulators. The President's Working Group on Financial Markets recognizes the problem was caused largely by "weak government oversight," which allowed loan originators to make loans without regard to whether families could afford to repay them. This diagnosis is correct, but it supports a broader set of solutions than those proposed by the Working Group to prevent another market meltdown and to help as many families as possible who've been...
March 6, 2008
The Institute for Foreclosure Legal Assistance today announced it has awarded $6.5 million in grants to 27 legal-aid offices in 19 states and the District of Columbia. The grants are the first step in a multi-year program to bolster local groups nationwide who are assisting the growing legion of borrowers facing foreclosure.
The Institute, a project of the Center for Responsible Lending and managed by the National Association of Consumer Advocates, made the awards to nonprofit groups that demonstrated they already have successful foreclosure prevention programs in place but need more...
February 29, 2008
Yesterday the mortgage lending industry successfully stopped a Senate bill, "The Foreclosure Prevention Act" from moving forward. This bill (S. 2636) includes key provisions that would prevent well over 1/2 million foreclosures and avoid property declines of $200 billion.
"While many members of Congress are working hard to prevent foreclosures, some members of the lending industry are preventing legislation that Americans desperately need," said Michael Calhoun, President of the Center for Responsible Lending (CRL). "Congress has recognized that we need a bipartisan solution to stop...
February 12, 2008
For the third time in four months, the Treasury Department has announced a plan ("Project Lifeline") to encourage the lending industry to do more to prevent an alarming level of foreclosures. The Department's proposals underscore the serious economic damage triggered by reckless lending in the subprime market, which has produced the worst housing decline since the Great Depression.
We at the Center for Responsible Lending welcome any help for homeowners struggling with unaffordable loans, including this announcement, but we are concerned that Project Lifeline comes with a rope that is too...
February 7, 2008
New legislation introduced today by House Financial Institutions and Consumer Credit Subcommittee Chairwoman Rep. Carolyn Maloney (D-NY) and Financial Services Committee Chairman Barney Frank (D-MA) curbs some of the most abusive credit card lending practices, consumer groups said.
"This legislation is an important step forward in eliminating the worst credit card tricks and traps that sap billions of dollars from Americans' wallets every year and illegitimately pump up issuers' profits," said Travis B. Plunkett, legislative director of the Consumer Federation of America. "We commend...
January 31, 2008
Recently the Center for Responsible Lending (CRL) released an analysis showing that during the third quarter of 2007, mortgage lenders initiated foreclosures seven times more frequently than they modified mortgages, and 13 times more frequently than they modified problematic adjustable-rate subprime loans. In addition, CRL estimated that under the Treasury Department's voluntary plan, only 3% of homeowners (118,200) with adjustable-rate subprime mortgages are likely to receive a streamlined loan modification from their lender.
In a defensive rebuttal, the Mortgage Bankers Association (MBA...
January 28, 2008
Read our Analysis>>
An updated analysis by the Center for Responsible Lending shows the Treasury Department's plan involving streamlined loan modifications of distressed mortgages will prevent only 118,200 foreclosures—about 3% of the outstanding subprime mortgages with adjustable interest rates that are causing the current market turmoil. This analysis shows the Treasury plan, plus existing lender modifications, barely make a dent in the growing foreclosure crisis and will allow subprime damage to continue spreading through the entire economy.
The Center's analysis is based on...
January 25, 2008
As the economy continues to suffer from fall-out from subprime mortgage foreclosures, Mortgage Electronic Registration Systems, Inc. (MERS) is accused of skipping legally required steps to remove people from their homes in Minnesota. Today a group of Hennepin County homeowners with subprime mortgages filed a class action lawsuit to stop illegal foreclosures by MERS, a Virginia-based company.
The suit alleges that MERS, which handles 40% of the foreclosures in the seven-county metropolitan area, violates Minnesota law by expediting foreclosures without following mandatory procedures. Some...
January 11, 2008
Bank of America has the resources and the will to begin cleaning up the subprime mess that Countrywide has played such a large role in creating. We have nine months between now and the official merger date. This will be the most important period since the Great Depression for dealing with the millions of bad Countrywide loans that have pushed families to the brink of foreclosure. The number one priority during this critical period is fixing these bad loans and keeping people in their homes.
Over the past few years, by steering millions of people into bad loans, Countrywide has been the...