Stein Statement: Common-Sense Bankruptcy Solutions Would Save Homes

I'm Eric Stein, chief operating officer of Self-Help, a non-profit community development lender, and senior vice president of the Center for Responsible Lending. Thank you for having me here today to talk about bankruptcy solutions that could help prevent the massive home losses occurring today. As a result of loans that never should have been made, 2.2 million families have already lost or will lose their homes and billions of dollars in wealth. These losses will hurt everyone, not just the families who lose their homes. For example, everyone with a $150,000 house who lives on a block with 3

Civil Rights Groups Want Foreclosure Moratorium

WASHINGTON, DC – April 4, 2007 – National civil rights groups, including the Leadership Conference on Civil Rights, the NAACP, the National Fair Housing Alliance, the National Council of La Raza, and the Center for Responsible Lending called today for mortgage lenders, loan servicers and loan investors to institute an immediate six-month moratorium on subprime home foreclosures resulting from reckless and unaffordable loans in the subprime market. The groups want to stop home losses for families that received unaffordable subprime mortgages with "payment shock." The predominant loan type

Immediate reforms needed to stem foreclosure tide

California consumer groups will have plenty to say Monday when the California Senate Banking convenes a hearing to discuss the implosion of the subprime market and its impact on California homeowners and the economy. "Borrowers are losing homes and subprime lenders are closing their doors every day," said Paul Leonard, director of the Oakland-based California office of the Center for Responsible Lending (CRL), a research and policy organization dedicated to ending abusive financial practices. "It is imperative that California acts to prevent this crisis from happening in the future, and helps

National Groups Thank Regulators

The devastating reign of "exploding" adjustable-rate mortgages (ARMs) in the subprime market may soon be over. Today federal banking and credit union regulators proposed to clamp down on these risky loans by requiring depository institutions to do more careful assessments before approving these loans for credit-strapped consumers. Exploding ARMs, which begin with a fixed "teaser" interest rate for two or three years and then switch to an escalating adjustable rate, are the most common type of loan in the subprime market, and they have been linked to an alarming increase in foreclosures on

Freddie Mac Bans Unaffordable Subprime Home Loans

In recent years, lenders making higher-risk, higher-cost "subprime" home loans have flooded the market with dangerous hybrid mortgages, often approved without considering whether the borrower could afford the loan. Today Freddie Mac took a major step for responsible lending by announcing it will no longer buy common types of subprime mortgages that have been pushing millions of homeowners into foreclosure. The Center for Responsible Lending joins AARP, Consumer Federation of America, Leadership Conference on Civil Rights, NAACP, National Fair Housing Alliance, and Rainbow/Push in commending

Groups ask regulators to extend guidance

Yesterday more than 80 diverse groups representing over 60 million Americans called on federal financial regulators to clarify that high-risk subprime adjustable-rate mortgages (ARMs) should be subject to the same lending standards as other risky products identified by regulators. Last fall, the regulators issued tougher guidelines for lenders that offer certain "non-traditional" mortgages. The regulatory edict—formally known as "guidance"—failed to clearly include harmful ARMs that are marketed to credit-strapped families of modest means in the high-cost subprime market. The loan types not

Preserve Military Lending Act

Banks want to be exempted from a new federal law protecting military families from predatory lending, but military and consumer advocates are asking the Pentagon to deny such an exemption and protect borrowers from any usurious lending, no matter who is making the loans. A measure protecting troops from predatory lenders was passed by Congress last fall as an amendment to the Defense Authorization bill, and the Pentagon is writing rules for its implementation in October. But the American Bankers Association and America's Community Bankers have asked the Pentagon to exempt banks from the

CRL Joins Groups Calling For Sustainable Homeownership Policies

WASHINGTON, DC –Tomorrow, Martin Eakes, CEO of the Center for Responsible Lending, will testify about rising subprime foreclosures before the Senate Committee on Banking, Housing and Urban Affairs. CRL has joined a coalition of civil rights, consumer, labor and community development organizations calling on policymakers to rein in risky lending practices in the loosely regulated mortgage market. Homeownership is the most accessible tool available to help families achieve a secure economic future, but today market failures and abusive lending practices are leading millions of families into

Debit & ATM overdrafts

WASHINGTON, DC – Banks across the nation are taking advantage of the upward trend in debit card use to make high-cost overdraft loans more common and still costlier, according to a study released by the Center for Responsible Lending (CRL) today. "What banks are calling 'bounce protection' is starting to look more like a 'protection racket,'" said Eric Halperin, director of CRL's Washington office and a co-author of the report. "Banks are raking in fees from unwitting customers who would not overdraft if given a choice." The report, "Debit Card Danger," analyzed the checking accounts of more

Calhoun statement: "Losing Ground" release

This is Mike Calhoun for the Center for Responsible Lending. We appreciate the participation of the National Association of Realtors and the Leadership Conference on Civil Rights, and we also thank you in the media for calling in. The research we're releasing today shows that subprime lenders are selling the most dangerous loans to the most vulnerable borrowers, creating the largest rash of foreclosures in the modern mortgage market. This conclusion is driven by some powerful numbers: 2.2 million subprime home loans made in recent years have already failed or will end in foreclosure. These