Press Releases

With 2 million foreclosures predicted over the next two years, the plan announced by President Bush for targeted loan modifications for some subprime borrowers is a positive, but very limited, first step. CRL estimates the President's plan will only help about 7% of subprime borrowers—about 145,000 families—because of the program's limited scope. For example, the plan does nothing to help hundreds of thousands of subprime borrowers who received "exploding" 2/28 adjustable-rate mortgages in 2005 (because these will have reset before the effective date of this plan) and those who have fallen

Gov. Arnold Schwarzenegger and California mortgage lenders Countrywide, GMAC, Litton and HomeEq announced today that they plan to follow the direction of FDIC Chairman Sheila Bair and institute systematic loan modifications for borrowers with resetting ARMs. This unprecedented move is expected to provide relief for tens of thousands of California borrowers and, if properly implemented, should serve as a model for other states experiencing record numbers of foreclosures. "Loan modifications that place borrowers into sustainable, affordable loans are the best ways to stem the foreclosure tide,"

The Honorable Barney Frank The Honorable Spencer Bachus Chairman Ranking Member House Financial Services Committee House Financial Services Committee Dear Chairman Frank and Ranking Member Bachus: We, the undersigned organizations, write to present our views on H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007. While we greatly appreciate your efforts to reduce predatory lending and to restore balance to the mortgage market, we believe this bill requires improvements in the areas described below in order for the bill to achieve its goals. Subprime lending has been a

U.S. House of RepresentativesWashington, DC 20515 Dear Representative: The undersigned groups are writing in anticipation of floor action on H.R. 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007." We appreciate the bipartisan effort on this important issue and look forward to working with the Congress to pass a strong law to protect consumers from predatory lenders. Unfortunately, however, despite some important consumer protections, we cannot support the legislation in its present form, given the lack of strong remedies for borrowers who receive unaffordable loans combined

Take it from former payday borrowers: loan sharks who left the state will not be missed. A new report from the North Carolina Commissioner of Banks has found that the absence of the payday loan shops that once dotted North Carolina's strip malls and street corners has made little difference to most survey respondents. Of the former borrowers who have noticed a difference, twice as many report that they are better off without payday lending. This comes as no surprise to those who understand the predatory nature of payday lending. These loans are structured so that borrowers typically cannot pay

Subprime foreclosures are resulting in a severe drain on property values—even for families paying their mortgages faithfully every month—and will cause 44.5 million homes to lose a total of $223 billion in wealth over the next few years, most of it in 2008 and 2009, according to the Center's report. In addition to foreclosed homeowners, the $223 billion drain—which amounts to $5,000 per nearby household—will have a severe impact on many cities and communities, because lower property values translate into less revenue to fund schools, hospitals, and other vital community organizations at the

We commend Chairman Frank and Representatives Watt and Miller for taking the lead in addressing the underlying problems that have led to the escalating foreclosure crisis in this country. Banning prepayment penalties in the subprime mortgage market, requiring lenders to assess each borrower's ability to repay, and eliminating the bonuses lenders now pay to brokers to put people in more expensive loans than those for which they qualify would go a long way to protecting families from the deceptive and abusive loans that ultimately lead to a decline in home ownership. We are glad the legislation

As the nation's foreclosure epidemic continues to worsen, the Center for Responsible Lending (CRL) has formed the Institute for Foreclosure Legal Assistance (IFLA) to support groups giving legal representation to families facing foreclosure and financial ruin because of abusive subprime mortgages. The National Association of Consumer Advocates (NACA) will manage the project, which recognizes that one of the biggest barriers families face to avoid losing their homes is the lack of access to quality legal services. The Institute, launched with a $15 million grant from investment management firm

We're glad leading members of Congress want to provide more legal and counseling help to the millions of families who have or will lose their homes to foreclosure because of reckless subprime lenders. Congress also must act quickly to change the bankruptcy code to allow judges to modify home loans on primary residences. Right now the code makes the family home the only asset the courts can't save from foreclosure, even though vacation and investment homes, family farms and commercial real estate can be protected. The change would help an estimated 600,000 families who face imminent danger of

As U.S. soldiers face continuing demands in the call to protect their country, starting October 1 they gain an extra measure of protection from a lingering financial threat to their own families. The federal Military Lending Act will take effect Monday, and will bar predatory lenders from gouging military families with payday loans that trap borrowers in debt and typically carry 400 percent annual interest rates. The new law caps interest at 36 percent for the certain payday, auto title, and refund anticipation loans made to military families. "The 36 percent cap will slow the predatory