Senator Sarbanes To Unveil Predatory Lending Legislation
April 23, 2002
Senator Paul S. Sarbanes (D-MD), Chairman of the Banking, Housing, and Urban Affairs Committee, will hold a press conference on Wed. May 1st to outline predatory lending legislation he will shortly introduce in the United States Senate. He will be joined by several of his Senate colleagues, Congressman John LaFalce (D-NY), the Ranking Member of the House Financial Services Committee, and representatives from several groups who have been actively involved in efforts to combat predatory lending across the country.
According to the Senator?s office, predatory lenders typically target vulnerable people with equity in their homes. They underwrite the property without establishing a borrower's ability to repay the loan. The brokers or lenders typically make their money by charging extremely high points and origination fees, and by "packing" other products into the loan, including up-front premiums for credit insurance, for which they get significant commissions. The financing of these fees greatly increases the balance of the loan and leaves the borrower with exorbitant monthly payments, in many instances leading to the loss of the home.
As Chairman of the Senate Banking, Housing, and Urban Affairs Committee, Sarbanes has made eliminating predatory lending practices a major focus of his Chairmanship. Since becoming Chairman of the Committee 10 months ago, Sarbanes has held 3 full Committee hearings on predatory lending related practices.
Source: Senator Sarbane Press Release