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Government Did Not Require Reckless Lending
Don't Believe the Revisionist History Once upon a time, the lending industry was the loudest cheerleader in the subprime lending game, and there were no referees to stop the action. Now industry claims the government made them make millions of reckless mortgages. In fact, today's financial meltdown began with reckless subprime lending that was driven by Wall Street's desire for...
Briefing on the Mortgage Crisis and Its Impact on the Economy
Committee: US House of Representatives Committee on the Judiciary
Turmoil in the U.S. Credit Markets: The Genesis of the Current Economic Crisis
Committee: Senate Committee on Banking, Housing and Urban Affairs
CRA is not to Blame for the Mortgage Meltdown
It's time to stop the scapegoating: According to a study by the Federal Reserve, 94% of high-cost loans originated during the housing boom had nothing to do with Community Reinvestment Act goals. Lending to poor didn't spur crisis -Fed's Kroszner The Comptroller of the Currency. John C. Dugan, agrees: "CRA [the Community Reinvestment Act] is not the culprit behind the...
Wealth-stripping payday loans trouble communities of color
People of color have less wealth than their white counterparts, making them more vulnerable to predatory lending. This, in turn, threatens to further widen the wealth gap. Research from several states suggests that people of color are disproportionately impacted by 400 percent APR payday lending. An examination of payday lending storefront locations in Maricopa and Pima Counties—in which over three-quarters...
HB 2188 Earlier Notification of Mortgage Servicer Fee
Summary Full Session Law This legislation does two things. First, it made technical corrections to provisions enacted last year providing new protections for consumers in loan servicing. Second, the law banned subprime yield-spread premiums (YSPs). YSPs are compensation paid to a broker for increasing the interest rate on a loan or for getting the borrower to agree to accept unfavorable...
Bailout: Government's Power to Modify Loans Limited
As Congress considers the $700 billion bailout proposal, some argue that if the government acquires mortgage-backed securities (MBS) that include distressed loans, the government will have the right to modify those loans to prevent foreclosures. Unfortunately, this simply isn't true. Just as corporate bond holders have no right to control the bond issuer's management decisions, so too do MBS holders...
The Problem with the Paulson Bailout Plan
Any Real Financial Solution Must Stop Foreclosures The government's proposed bailout plan is a $700 million gift to the financial industry that comes with no accountability and will do nothing to stop millions of foreclosures. Under the Paulson plan, the government will take ownership of bad investments, not individual loans. Consider these facts: An estimated 2.3 million foreclosures will occur...
Updated Projections of Subprime Foreclosures in the United States and Their Impact on Home Values and Communities
New Foreclosure and Spillover Projections We now project that almost 2.2 million subprime foreclosures will occur primarily in late 2008 through the end of 2009, up from our original 1.1 million estimate made in 2006. Additionally we estimate that 40.6 million homes in neighborhoods surrounding those foreclosures will suffer price declines averaging over $8,667 per home and resulting in a...
Subprime Loan Foreclosures & Delinquencies versus Lender Workouts
New Foreclosure and Spillover Projections We now project that almost 2.2 million subprime foreclosures will occur primarily in late 2008 through the end of 2009, up from our original 1.1 million estimate made in 2006. Additionally we estimate that 40.6 million homes in neighborhoods surrounding those foreclosures will suffer price declines averaging over $8,667 per home and resulting in a...
Judicial Modification of Loans Would Save 600,000 Homes: Purchase of Securities Will Save None
Proposed financial bailout bill will not help people save their homes. The government proposes to purchase hundreds of billions of dollars of illiquid mortgage-related assets as a response to this country's financial crisis. The vast majority of these assets are securities issued privately through Wall Street that are backed by subprime or Alt A home loans, meaning that the government...
Federal Ownership of Troubled Securities Alone Will Not Stop Foreclosures that Drag Down the Economy
Federal Ownership of Troubled Securities Alone Will Not Stop Foreclosures that Drag Down the Economy
Allowing the Federal government to purchase illiquid mortgage-backed securities (MBS) has been presented as a comprehensive solution to the economic crisis, but it has a serious flaw. This plan will NOT increase loan modifications that prevent foreclosures. Large-scale loan modifications—adjusting the terms of a loan to make it affordable—is the only way to prevent massive foreclosures still ahead. Under the...
High-Cost Payday Lending Traps Arizona Borrowers
Over 700 payday lenders charging up to 459% annual percentage rate (APR) for a two-week loan are located throughout Arizona; with the highest concentrations per capita in Pinal, Mohave, and Maricopa Counties. A typical Arizona borrower pays an estimated $516 in fees for a $325 payday loan and still owes the $325 in principal. Overall, payday lending costs Arizona families...
HUD’s Proposed RESPA Rule
Committee: U.S. House of Representatives Committee on Financial Services Subcommittee on Oversight and Investigations
The Mortgage Crisis Today: How Far Have We Come and Where Do We Need to Go?
Committee: California State Assembly Banking and Finance Committee
The Mortgage Crisis Today: How Far Have We Come and Where Do We Need to Go?
Download Paul Leonard's Presentation >> Committee: California State Assembly Banking and Finance Committee
A Review of Mortgage Servicing Practices and Foreclosure Mitigation
Committee: U.S. House of Representatives Committee on Financial Services For questions about this testimony, contact Julia Gordon at julia.gordon@responsiblelending.org or (202) 349-1878.
IndyMac: What Went Wrong: How an “Alt-A” Leader Fueled Its Growth With Unsound and Abusive Mortgage Lending
CRL has uncovered substantial evidence that IndyMac Bank engaged in unsound and abusive lending during the mortgage boom, routinely making loans without regard to borrowers' ability to repay. CRL interviews with former employees and lawsuits in 10 states indicate that IndyMac: pushed through loans based on bogus appraisals and income data that exaggerated borrowers' finances, worked hand-in-hand with mortgage brokers...