Research & Policy

FHFA has the mandate and the opportunity to improve mortgage servicing practices. CRL recommends incentives to encourage better service by loan servicers and to promote more timely and effective loss mitigation, free of abusive and unfair practices.

This case involves borrowers who purchased a vehicle through a dealership in California. The financial institution in question, Wachovia, did not make the loans, but later purchased the installment contracts from the dealer. When the borrower fell behind on their payments, Wachovia repossessed the cars without properly following California law. California allows self-help repossession, but has strict rules regarding consumers'...

Short-term loan carries 365%-plus APR At least four large banks are making payday loans directly to their customers, and more plan to do so. Bank payday loans trap borrowers in debt, like the street corner payday loans that strip $4.5 billion per year from Americans. Bank payday loans often send borrowers into financial devastation. Bank payday lending circumvents state consumer...

Five years into the foreclosure crisis, borrowers across the country are still struggling with their mortgage payments, and are seeking out the help of housing counselors to help them manage their finances and guide them through the loan modification process. Between 2008 and 2011, the National Foreclosure Mitigation Counseling Program assisted nearly 1.2 million homeowners with foreclosure counseling, and provided...

On November 17, 2011, Center for Responsible Lending published new research that shows that the nation is not even halfway through the foreclosure crisis. Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures finds that: (1) foreclosure rates are closely tied to harmful loan terms, and (2) the majority of foreclosures have been experienced by white households, though African-American and...

"Lost Ground, 2011" is based on an analysis of 27 million mortgages made over a five-year period. Here are our top-line findings: The nation is not even halfway through the foreclosure crisis. 6.4 percent of mortgages made between 2004 and 2008 have ended in foreclosure, and an additional 8.3 percent are at immediate, serious risk. Foreclosure patterns are strongly linked...

Read our report -- Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures Completed Foreclosures and Serious Delinquencies (2004 – 2008 mortgage originations) STATES By borrower race & ethnicity By borrower income By neighborhood income By neighborhood minority concentration METROPOLITAN AREAS By borrower race & ethnicity By borrower income By neighborhood income By neighborhood minority concentration

CRL also filed an amicus brief to the New Jersey Supreme Court, advocating for strict compliance with New Jersey's Fair Foreclosure Act and the federal Truth in Lending Act's intentional reordering of the common law rescission process to effectuate Congress's intent that rescission under TILA be a practical tool to save homes from foreclosure. Both statutes play a critical role...

The Center for Responsible Lending commented on Capital One's proposed acquisistion of ING Bank at a public meeting held by Federal Reserve on September 20, 2011. Summary CRL has done extensive research and policy work addressing checking account overdraft practices that cause significant harm to bank customers. We are concerned that Capital One's current overdraft practices are out of step...

As state Attorneys General wrap up their robo-signing investigation, CRL joins Americans for Financial Reform in urging AGs to produce a strong settlement for homeowners: one that prevents unnecessary foreclosures and keeps the door open for more legal remedies in the future.

HB 484 transfers the authority of the State Home Foreclosure Prevention Project (SHFPP), a very important program for NC homeowners at risk of foreclosure, from the NC Commissioner of Banks (NCCOB) to the NC Housing Finance Agency (NCHFA). Since the NCHFA was already administering a number of foreclosure prevention programs, most notably the NC Foreclosure Prevention Fund, this new law...

HB 717 bill excludes certain mortgage insurance premiums from our NC definition of "points and fees" in high cost home loans, weakening our predatory mortgage lending protections. The NC Commissioner of Banks (NCCOB) persuaded the bill sponsors to allow NCCOB to investigate these issues further and recommend to the legislature what action, if any, should be taken. Since the bills...

HB 773, the omnibus Studies Act of 2011, includes language that would have created a joint study commission on consumer finance loans under $3000 (see page 52). This would be the fourth study commission in 5 years. However, it appears that the studies bill cannot be approved until the short session starting in May 2012. The Senate made several changes...

SB 1015, the Homeowner and Homebuyer Protection Act, was passed in 2010. This legislation addressed a number of predatory real estate practices that took advantage of families having trouble paying their home loan or finding a decent loan to buy a home. These abuses included foreclosure rescue scams, as well as lease option and contract for deed agreements. HB 654...

The North Carolina Consumer Finance Act lets non-bank lenders make installment loans of $10,000 or less. House Bill 810, Consumer Finance Act Amendments, as amended, would have: Increased the maximum loan size from $10,000 to 15,000, Increased the interest charged on these loans, which can already be as high as 54% annual interest, Added numerous new fees, and Continued to...

HB 814 and its companion SB 559, Fair Compensation for Mortgage Broker/Lender would have rolled back mortgage lending protections in our state including: Weakening our predatory mortgage lending protections by raising the limits on allowable fees and discount points, Cutting broker bond requirements in half, a serious problem for borrowers who have been harmed by a broker, and Reducing the...

North Carolina allows wage garnishment for certain judgments, such as child support and taxes. House Bill 30 as originally drafted, Allow Wage Garnishment to Satisfy Judgments, would have expanded wage garnishment to other judgments, putting struggling families at severe financial risk. Once concerns were raised with the bill sponsor, the bill was amended significantly to deal with issues raised by...

CRL supports the principles laid out in the OCC's proposed guidance on overdraft and bank payday loans, but hopes the OCC will dramatically strengthen its guidance to address existing problems and to avoid inadverdently entrenching abuses. Among our recommendations, CRL urges the OCC to act quickly and decisively to stop payday lending before it becomes pervasive among banks. CRL also...

Consumer groups fear OCC proposed guidance may legitimize and facilitate the spread of payday lending by national banks, and banks would continue abusive overdraft practices—harming bank customers, undermining state payday loan laws, and weakening the long-term safety and soundness of financial institutions.

Federal regulators are proposing to mandate down payments as high as 20% on future home loans, but even a 10% down payment requirement would stifle economic recovery and lock out responsible home buyers. How Many Years Would it Take These Workers to Save for a 10% Down Payment? Graph: Years to save for 10% down payment by 10 common occupations...

The mortgage market of the future can drive economic growth without shutting out responsible home buyers. Here is an overview of CRL's recommendations to regulators: The Agencies should delay finalizing the QRM rule until after the final QM rule has beenissued. The QRM final rule should be harmonized with the QM final rule to facilitate compliance. QRM loans should meet...

In its first formal comment to the CFPB, the Center for Responsible Lending supports new Dodd-Frank mortgage reforms and urges the CFPB to ensure that lenders have appropriate consequences if they fail to abide by the rules.

In its first formal comment to the CFPB, the Center for Responsible Lending supports new Dodd-Frank mortgage reforms and urges the CFPB to ensure that lenders have appropriate consequences if they fail to abide by the rules.

A new CRL report describes how banks are adding payday loans to their arsenal of predatory loan products. These loans drain cash from cash-strapped Americans, often social security recipients. The banks are making loans to their checking account customers based on the customer's direct deposit paycheck. The fees are high and the entire principal is deducted on payday, which, like...