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Press Releases

February 27, 2007
In recent years, lenders making higher-risk, higher-cost "subprime" home loans have flooded the market with dangerous hybrid mortgages, often approved without considering whether the borrower could afford the loan. Today Freddie Mac took a major step for responsible lending by announcing it will no longer buy common types of subprime mortgages that have been pushing millions of homeowners into foreclosure. The Center for Responsible Lending joins AARP, Consumer Federation of America, Leadership Conference on Civil Rights, NAACP, National Fair Housing Alliance, and Rainbow/Push in commending...
February 22, 2007
Yesterday more than 80 diverse groups representing over 60 million Americans called on federal financial regulators to clarify that high-risk subprime adjustable-rate mortgages (ARMs) should be subject to the same lending standards as other risky products identified by regulators. Last fall, the regulators issued tougher guidelines for lenders that offer certain "non-traditional" mortgages. The regulatory edict—formally known as "guidance"—failed to clearly include harmful ARMs that are marketed to credit-strapped families of modest means in the high-cost subprime market. The loan types...
February 6, 2007
WASHINGTON, DC –Tomorrow, Martin Eakes, CEO of the Center for Responsible Lending, will testify about rising subprime foreclosures before the Senate Committee on Banking, Housing and Urban Affairs. CRL has joined a coalition of civil rights, consumer, labor and community development organizations calling on policymakers to rein in risky lending practices in the loosely regulated mortgage market. Homeownership is the most accessible tool available to help families achieve a secure economic future, but today market failures and abusive lending practices are leading millions of...
February 6, 2007
Banks want to be exempted from a new federal law protecting military families from predatory lending, but military and consumer advocates are asking the Pentagon to deny such an exemption and protect borrowers from any usurious lending, no matter who is making the loans. A measure protecting troops from predatory lenders was passed by Congress last fall as an amendment to the Defense Authorization bill, and the Pentagon is writing rules for its implementation in October. But the American Bankers Association and America's Community Bankers have asked the Pentagon to exempt banks from the...
January 25, 2007
WASHINGTON, DC – Banks across the nation are taking advantage of the upward trend in debit card use to make high-cost overdraft loans more common and still costlier, according to a study released by the Center for Responsible Lending (CRL) today. "What banks are calling 'bounce protection' is starting to look more like a 'protection racket,'" said Eric Halperin, director of CRL's Washington office and a co-author of the report. "Banks are raking in fees from unwitting customers who would not overdraft if given a choice." The report, "Debit Card Danger," analyzed the checking...
December 19, 2006
This is Mike Calhoun for the Center for Responsible Lending. We appreciate the participation of the National Association of Realtors and the Leadership Conference on Civil Rights, and we also thank you in the media for calling in. The research we're releasing today shows that subprime lenders are selling the most dangerous loans to the most vulnerable borrowers, creating the largest rash of foreclosures in the modern mortgage market. This conclusion is driven by some powerful numbers: 2.2 million subprime home loans made in recent years have already failed or will end in foreclosure....
December 19, 2006
Washington, DC – December 19, 2006 – A new Center for Responsible Lending (CRL) study reveals that 2.2 million American households will lose their homes and as much as $164 billion due to foreclosures in the subprime mortgage market. Titled, "Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners," the CRL study is the first comprehensive, nationwide review of millions of subprime mortgages originated from 1998 through the third quarter of 2006. CRL's research suggests that risky lending practices have triggered the worst foreclosure crisis in the...
November 30, 2006
Good afternoon. I am Michael Calhoun, president of the Center for Responsible Lending. We are a nonprofit, non-partisan research and policy organization that protects family wealth by working to eliminate abusive financial practices. I thank our fellow presenters today. They are Jean Ann Fox, director of consumer protection for the Consumer Federation of America, who has done groundbreaking work on the payday lending issue for a decade, and Julian Bond, chairman of the NAACP, whose life work has contributed greatly to the cause of economic justice. Today, CRL is releasing "Financial...
November 30, 2006
Payday lenders pocket $4.2 billion in excessive fees each year from Americans who seek a two-week loan and end up trapped in debt, according to a new report released today by the Center for Responsible Lending. The study calculates the cost of predatory payday lending state-by-state and also estimates that borrowers save $1.4 billion in states that enforce reasonable interest rate caps. "Payday loans sink borrowers into quicksand-like debt," said Michael D. Calhoun, CRL president. "Borrowers end up paying more in interest -- at rates of 400 percent -- than the amount they originally...
September 29, 2006
Federal financial regulators took a step toward making the mortgage market safer for borrowers today, although there is still much more they can do. Alarmed by a huge increase in new types of mortgages with monthly payments that can make huge leaps, causing "payment shock" to families, regulators will now require lenders to consider whether a borrower can afford these types of home loans. That means fewer homeowners in the future will wind up losing their homes to the banks through foreclosure. The securities business already requires stockbrokers to consider whether investors can...

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