HUD, Treasury Release Joint Report Recommending Actions To Curb Predatory Lending
|June 20, 2000|
Treasury Secretary Lawrence H. Summers and Housing and Urban Development Secretary Andrew Cuomo today released a joint HUD-Treasury report detailing recommendations on legislative, regulatory, and other steps to curb the increasing occurrence of predatory mortgage lending.
"These critical recommendations will help protect American families from the abusive practices of some unscrupulous lenders," said Secretary Summers. "Predatory lending practices should have no place in the subprime market, or any other market."
Secretary Cuomo said: "Predatory lenders are greedily devouring families? life savings and destroying good neighborhoods all across the country. We heard horror stories at our forums around the country about the suffering these lenders have caused, and Members of Congress have heard the same stories. We ask Congress to join us and move swiftly to give American homebuyers the protection they need from predatory lenders."
Based on information gathered at five field forums by the joint HUD-Treasury Task Force on Predatory Lending, the report, "Curbing Predatory Home Mortgage Lending," proposes a four-point plan to address predatory lending practices:
Senators Paul Sarbanes of Maryland and Charles Schumer of New York and Congressman John LaFalce of New York have all introduced important legislation to combat predatory lending.
"I want to commend Secretary Cuomo, Secretary Summers and the members of the Predatory Lending Task Force for their thorough and excellent work," said Senator Paul Sarbanes. "This report incorporates the key principles contained in the LaFalce-Sarbanes legislation and lays out a roadmap for action by the Congress and the regulators that will help put an end to these abusive practices."
Representative John LaFalce said: "The Task Force has made strong recommendations that -- if they are fully implemented -- can make a real difference in curbing abusive predatory lending practices. I am particularly pleased that the Task Force's report embraces the principal elements of the LaFalce-Sarbanes predatory lending bill introduced earlier this year."
Senator Charles Schumer, who recently released a report on predatory lending in New York, added: "It is clear that we need to focus a spotlight on predatory lenders whose sole purpose is to hijack the American dream from unsuspecting borrowers. We should leave no stone unturned to find and crack down on predatory lenders and Congress must pass the strongest legislation possible to end this pernicious practice."
While expanded access to credit from both prime and subprime lenders has contributed to the highest homeownership rates in the nation?s history, there is growing evidence that some lenders are engaging in predatory lending practices ? excessive front-end fees, single premium credit life insurance, and exorbitant prepayment penalties ? that make homeownership much more costly for families that can least afford it.
Source: Department of Housing and Urban Development