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Press Releases

June 29, 2007
The California legislature's subprime lending bill, SB 385 sponsored by Sen. Michael Machado (D-Linden) fails to protect consumers from dangers in the subprime market, the Center for Responsible Lending (CRL) said today. The legislation merely would require California's regulatory agencies to adopt federal guidelines covering certain "nontraditional" mortgage products that the same regulators have already published for comment and plan to finalize later this summer. The bill and the regulations do not cover the subprime products that have been the largest source of defaults and...
June 21, 2007
Foreclosures, particularly on subprime home loans, continue to rise. The Center for Responsible Lending projects that subprime mortgages made in recent years will ultimately result in the loss of a home for 2.2 million families. Yet, although the sharp upward trend in foreclosures is undeniable, some in the lending industry are criticizing information provided by one data-aggregating firm, RealtyTrac, to suggest that foreclosure concerns have been overblown. Unfortunately, nothing could be further from the truth. Recent reports from business analysts, investment banks and even mortgage...
June 12, 2007
Put muscle in predatory lending regulations, consumer groups urge Consumer advocates strongly urged the Department of Defense Monday to make significant changes to proposed federal regulations to ensure that predatory lenders can no longer strip earnings from U.S. soldiers and their families. As written, the regulations will leave loopholes large enough for payday, auto title and other predatory lenders to glide through, letting them gouge military borrowers without regard for a pending 36 percent interest rate cap, said the groups in a written response to the Pentagon's request for...
May 22, 2007
We're glad subprime lenders have recognized that their industry needs to be cleaned up with responsible lending practices. Their statement comes in the wake of a reckless lending spree that, for the most part, was entirely legal under current law. The consequence has been a massive loss in homeownership that is setting millions of hard-working families back, and causing economic hardship in hundreds of communities across the country. The Center for Responsible Lending estimates that over 2.2 million families have lost or will lose their home in the subprime market. We agree with the...
April 12, 2007
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...
April 4, 2007
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...
March 23, 2007
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...
March 2, 2007
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...
February 27, 2007
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...
February 22, 2007
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...

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