Housing Opportunity Program    RPAC    Banks in Real Estate    News Media    Online REALTOR® Ethics Training      Logos		ISSUE: Predatory lending practices and subprime lending are not synonymous, though many critics disregard the distinctions. Predatory lending practices are almost exclusively associated with lending to consumers who are vulnerable or have impaired credit histories. Heightened scrutiny of abusive and predatory practices has lead to federal and state legislative proposals and more activism among regulators under existing laws to curb predatory lending. NAR POSITION: The National Association of REALTORS® opposes abusive or predatory lending practices such as unsuitable loan terms and deceptive claims that can result in home equity stripping, diminished personal credit standing, or violations of federal consumer protection statutes and regulation. OPPOSING VIEWS: Some lenders oppose efforts to regulate predatory lending practices arguing that aggressive restrictions on predatory lending may unintentionally limit credit to deserving borrowers. IMPACT ON REALTORS®: REALTORS® support increasing the availability of mortgage credit to potentially creditworthy borrowers whether in the "prime" or in "subprime" credit markets. STATUS/OUTLOOK: Federal and state legislators and regulators have considered anti-predatory lending practices initiatives. In January 2001 the federal banking regulators jointly issued supervisory guidance on subprime lending that defined predatory lending as likely to include practices or loan terms that deliberately deceive borrows, strip homeownership equity, or induce a borrower to repeatedly refinance with higher points and fees. The Federal Trade Commission has executed successful actions against home equity lenders whose practices deliberately strip homeowner equity and set up foreclosures. Fannie Mae and Freddie Mac have anti-predatory lending initiatives that apply to the purchase money and home equity loans that these two GSEs purchase. A number of state legislatures have considered and adopted legislation curbing predatory lending. Most recently Georgia and the District of Columbia passed bills to curb predatory lending. Several home equity lenders have challenged various state or local legislation in court or by refusing to make loans that would be classed as predatory under state law or local ordinances. CONTACTS: George Griffin 202-383-1102, Edward Miller 202-383-1171 PRIMARY REALTOR® COMMITTEE: Conventional Finance and Lending Committee
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