TITLE: Predatory Mortgage Lending: The Problem, Impact, and Responses

CIS-NO: 2003-S241-3  
SOURCE: Committee on Banking, Housing, and Urban Affairs. Senate  
DOC-TYPE: Hearing Retrieve the full text of testimony  
DOC-NO: S. Hrg. 107-774  
DATE: July 26, 27, 2001  
LENGTH: v+494 p. il.  
CONG-SESS: 107-1  
ITEM-NO: 1035-C; 1035-D  
SUDOC: Y4.B22/3:S.HRG.107-774  
 
GPO-STOCK-NO: 552-070-29235-7.

SUMMARY:
Hearings to examine predatory practices related to home mortgage market subprime lending, in which lenders offer loans at higher-than-normal interest rates to high-risk borrowers who do not qualify for loans at normal rates.
 
Also examines proposals to combat predatory lending, including proposals to revise or expand the Home Ownership and Equity Protection Act (HOEPA) of 1994 to cover more types of loans and provide enhanced protections against predatory lending.
 
Predatory lenders typically induce consumers to take high-interest home equity loans that are "packed" with costly credit insurance, and then persuade borrowers to "flip" or refinance the loans repeatedly, charging points and fees each time, increasing the debt until borrowers default and lenders can foreclose, stripping equity from the borrowers.
 
Supplementary material (p. 51-240, 288-494) includes submitted statements, witnesses' written statements and written replies to Committee questions, correspondence, articles, and:
   -- Litan, Robert E., "Prudent Approach to Preventing "Predatory' Lending" Feb. 2001, with bibliography (p. 193-209).

CONTENT-NOTATION: Home mortgage and equity loan abuses, issues review and regulatory proposals

DESCRIPTORS:  
    BIBLIOGRAPHIES; MORTGAGES; CONSUMER CREDIT; BUSINESS ETHICS; HOUSING REGULATION; FINANCIAL REGULATION; INTEREST RATES; HOME OWNERSHIP AND EQUITY PROTECTION ACT; INSURANCE

03-S241-3 TESTIMONY NO: 1     July 26, 2001 p. 12-28
 
WITNESSES (and witness notations):
   MACKEY, CAROL
   SATRIANO, PAUL
   WILLIAMS, LEROY
   PODELCO, MARY (all alleged predatory mortgage lending victims)
 
STATEMENTS AND DISCUSSION:
   Experiences with alleged predatory mortgage lending practices.
 
CONTENT NOTATION:
   Home mortgage and equity loan abuses, issues review and regulatory proposals
 
 
03-S241-3 TESTIMONY NO: 2     July 26, 2001 p. 29-50, 53-142
 
WITNESSES (and witness notations):
   MILLER, THOMAS J. (Attorney General, Iowa)
   PROUGH, STEPHEN W. (Chairman, Ameriquest Mortgage Co)
   CALOMIRIS, CHARLES W. (Professor, Finance and Economics, Graduate School of Business, Columbia University)
   EAKES, MARTIN (President and CEO, Self-Help; also representing Coalition for Responsible Lending (CRL))
 
STATEMENTS AND DISCUSSION:
   Perspectives on predatory mortgage lending practices and regulatory proposals; differing recommendations to combat predatory lending; support for HOEPA revision and increased enforcement of existing lending laws; review of predatory lending developments in North Carolina; elaboration on related issues, including Federal and State role in predatory lending regulation.
 
INSERTIONS:
   a. National Association of Attorneys General, "Comments of Attorneys General of Thirty-One States to the Federal Reserve Board on Proposed Amendments to HOEPA Rules" Mar. 9, 2001 (p. 64-77).
   b. Stein, Eric (CRL), "Quantifying the Economic Cost of Predatory Lending" July 25, 2001 (p. 128-142).
 
CONTENT NOTATION:
   Home mortgage and equity loan abuses, issues review and regulatory proposals
 
TESTIMONY DESCRIPTORS:
   IOWA DEPARTMENT OF JUSTICE; AMERIQUEST MORTGAGE CO.; SELF-HELP; COALITION FOR RESPONSIBLE LENDING; FEDERAL-STATE RELATIONS; FEDERAL RESERVE BOARD; NORTH CAROLINA
 
 
03-S241-3 TESTIMONY NO: 3     July 27, 2001 p. 244-287, 289-434
 
WITNESSES (and witness notations):
   HENDERSON, WADE (Executive Director, Leadership Conference on Civil Rights)
   KENNEDY, JUDITH A. (President, National Association of Affordable Housing Lenders)
   CANJA, ESTHER (President, AARP)
   COURSON, JOHN A. (President and CEO, Central Pacific Mortgage Co.; representing Mortgage Bankers Association)
   ACKELSBERG, IRV (attorney, representing National Consumer Law Center and four other consumer advocacy organizations)
   FENDLY, NEILL A. (Immediate Past President, National Association of Mortgage Brokers)
   BERENBAUM, DAVID (Senior Vice President and Director, Civil Rights, National Community Reinvestment Coalition)
   WALLACE, GEORGE J. (Counsel, American Financial Services Association)
   WILLIAMS, LEE (President, Aviation Association Credit Union, Wichita, Kans.; representing Credit Union National Association)
   SHEA, MIKE (Executive Director, ACORN Housing Corp)
 
STATEMENTS AND DISCUSSION:
   Perspectives on predatory mortgage lending practices and regulatory proposals; differing recommendations to combat predatory lending; concern regarding impact of predatory lending on elderly, low-income, and minority homeowners (related materials, p. 304-310, 353-377, 400-415); elaboration on related issues, including arguments for HOEPA revision/expansion.
 
CONTENT NOTATION:
   Home mortgage and equity loan abuses, issues review and regulatory proposals
 
TESTIMONY DESCRIPTORS:
   CONSUMER FEDERATION; CONSUMERS UNION; NATIONAL ASSOCIATION OF CONSUMER ADVOCATES; U.S. PUBLIC INTEREST RESEARCH GROUP; ASSOCIATION OF COMMUNITY ORGANIZATIONS FOR REFORM NOW; LEADERSHIP CONFERENCE ON CIVIL RIGHTS; NATIONAL ASSOCIATION OF AFFORDABLE HOUSING LENDERS; AARP; MORTGAGE BANKERS ASSOCIATION; NATIONAL CONSUMER LAW CENTER; NATIONAL ASSOCIATION OF MORTGAGE BROKERS; NATIONAL COMMUNITY REINVESTMENT COALITION; AMERICAN FINANCIAL SERVICES ASSOCIATION; CREDIT UNION NATIONAL ASSOCIATION; AGED AND AGING; POVERTY; MINORITY GROUPS; STATISTICAL DATA: BANKING, FINANCE, AND INSURANCE

LOAD-DATE: June 5, 2003