US Subprime and Predatory Mortgage Lending Resources in United States
US Subprime and Predatory Mortgage Lending Resources
This page addresses fraudulent or abusive lending practices in the mortgage market, commonly referred to as predatory lending. The most prevalent categories of abusive practices include:
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Loan flipping-repeatedly refinancing loans, charging high fees each time.
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Excessive fees and “packing”-adding fees far exceeding those justified on economic grounds, often through loan terms, such as the financing of points, fees and pre-payment penalties, single-premium insurance (to cover the balance of the loan should a borrower die, paid in one sum and added to the amount financed) and balloon payments (those due at the end of a loan that are significantly higher than monthly payments).
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Asset-based lending-lending based on a borrower’s overall assets, rather than income and ability to repay.
Outright fraud and abuse.
Federal Activities
Combating Predatory Lending
Office of the Comptroller of the Currency
NCSL objects to two new rules implemented January 7, 2004, by the Office of the Comptroller of the Currency (OCC) to exempt national banks from state consumer protection laws and enforcement actions. Click here to review press release.
On April 17, 2007, the U.S. Supreme Court upheld the OCC exemption of national banks and their subsidiaries from state state consumer protection laws and enforcement actions. Click here to review the decision, Watters v. Wachovia.