Indictments, Arrests, Prosecutions
February 20, 2002
Federal Housing Department Takes Hard Line On Predatory Lending
Inman News Features
The U.S. Department of Housing and Urban Development today announced that a crackdown on predatory lending in Baltimore last year netted 40 indictments, six federal arrests, two state arrests, 27 successful prosecutions, 66 Federal Housing Administration debarments and $2.7 million in insurance recoveries.
"HUD's predatory lending initiatives are making the Baltimore housing market safer for hard-working families," said HUD Secretary Mel Martinez. "Our efforts in Baltimore have laid the groundwork for protecting more Americans throughout the country, as we work to combat predatory lending."
HUD is focusing anti-predatory lending efforts in areas with high foreclosure rates. Baltimore topped the nation in foreclosures and has emerged as HUD?s operational predatory lending laboratory.
Practices HUD is targeting include: flipping or repeated financings that result in point and fee revenue for lenders without benefits for the borrower; inflating a home's appraisal value; charging and financing excessive points and fees; packing loans with such additional products as credit insurance and memberships; charging extended repayment penalties that trap homeowners in high-interest loans; and conspiring with home improvement contractors to solicit loans on damaging terms or paying contractors directly and leaving borrower with no way to ensure the work is done.
Copyright: Inman News Service