Research & Policy

Our nation's current economic crisis was driven by, among other things, three significant shortcomings in the mortgage system: 1) loose or nonexistent underwriting standards; 2) misplaced financial incentives that created conflicts between industry profits and borrowers' interests; and 3) lack of accountability among industry players for loan quality or performance. Given this systemic failure, the State should step in to...

Former President George W. Bush's 2008 tax rebate was designed to stimulate the economy by putting dollars back into the hands of working people. In May of 2008, the IRS sent $600 checks to households making less than $75,000 per individual and $100,000 per couple, with an additional $300 for each qualified child. President Barack Obama has also proposed a...

Recent industry projections are that over eight million families will lose their homes to foreclosure over the next four years. That's one in every six homeowners with a mortgage. If the economy enters a deep recession, the number of homes lost could exceed 10 million. With the housing sector responsible for one in eight U.S. jobs, the flood of new...

Judicial modifications would save hundreds of thousands of families from foreclosure. "We [Credit Suisse] expect the bankruptcy plan will provide about a 20% reduction in foreclosures." (p. 1) "[T]he new plan adds an important new tool in the foreclosure avoidance arsenal…" (p.4) The ability to modify mortgages in bankruptcy will also increase voluntary loan modifications. "We [Credit Suisse] expect the...

Court-supervised loan modifications would preserve home values—without using public funds—while providing fair terms to lenders. Over the next several years, 8.1 million American families will lose their homes. Because of market declines, these struggling homeowners can neither refinance nor sell. Unless their mortgages are modified to align the loan amount with the value of the home, the foreclosure crisis will...

The foreclosure crisis is even worse than expected, and projected to worsen Recent industry projections are that over 8 million families will lose their home to foreclosure over the next four years. That's 1 in every 6 homeowners with a mortgage. If the economy enters deep recession, the number of homes lost could exceed 10 million. With the housing sector...

The Helping Families Save Their Homes in Bankruptcy Act of 2009 (S 61 and HR 200) The failure to stem the foreclosure crisis will cost the taxpayers hundreds of billions of dollars in lost tax revenues and economic decline. Recent industry projections are that over 8 million families will lose their home to foreclosure over the next four years. That's...

How OTS allowed reckless and unfair lending to fleece homeowners and cripple the nation's savings and loan industry. Although the Office of Thrift Supervision was created as a result of the first savings & loan crisis, history repeated itself as the OTS ignored bad lending practices and allowed thrifts to self-destruct. OTS permitted WaMu, IndyMac and other thrifts to engage...

Committee: U.S. House of Representatives Committee on Financial Services

In 2005, Alan Greenspan, then chairman of the Federal Reserve Bank, praised subprime mortgages as a positive innovation made possible by better risk assessment, and "representative of the market responses that have driven the financial services industry throughout the history of our country." Only two years later, there was growing concern that failing subprime loans, which had shot up to...

The California Office of the Center for Responsible Lending prepared the following documents to help California's newest legislators navigate the predatory payday lending arena. SNAPSHOT: Payday Lending in California Predatory Profiling: The Role of Race and Ethnicity in the Location of Payday Lenders in California About Us CRL's California Office Visit the Self-Help Web site to learn about Self-Help's Impact...

After years of industry-blocked efforts to strengthen lending standards, the growth in reckless lending and abusive practices has left California facing a foreclosure crisis with catastrophic consequences for families, communities, and the California economy as a whole. California needs policy reforms to stem the tide of foreclosures, and to tighten lending standards to prevent a repeat of this foreclosure crisis...

The California Office of the Center for Responsible Lending prepared the following documents to help California's newest legislators navigate the predatory mortgage lending arena. About Mortgage Lending SNAPSHOT: California Mortgage and Foreclosure Data January 2009 CA Foreclosures by Assembly and Senate District Read Paul Leonard's August 4 testimony on the state of the mortgage crisis in California, " The Mortgage...

There are more than 2,400 payday lending stores in California in 2008, more than all Starbucks and McDonald's combined. California borrowers took out more than 10 million payday loans in 2006, totaling $2.5 billion. Payday fees strip $405 million from payday borrowers annually. Payday loans are small, short-term loans secured by the borrower's personal check. The typical two-week loan is...

Download the executive summary (pdf) >> With roughly a trillion dollars in credit card debt, Americans have come to rely on their credit cards as both a form of payment for purchases and a flexible way to borrow cash. Credit cards are also a key source of income for financial institutions, with a rate of return that tends to be...

Read the Executive Summary >> Americans have come to rely on their credit cards as both a form of payment for purchases and a flexible way to borrow cash. The total amount of credit card debt is approaching a trillion dollars. Credit cards are a key source of revenue for financial institutions and usually among the most profitable loan products...

Jack Kemp, a former Republican secretary of Housing and Urban Development, in an LA Times editorial, said: "Bankruptcy law is wildly off-kilter in how it treats homeownership. Under current law, courts can lower unreasonably high interest rates on secured loans, reschedule secured loan payments to make them more affordable and adjust the secured portion of loans down to the fair...

Presented by Kathleen Keest, Senior Policy Counsel-Center for Responsible Lending at the symposium "The Subprime Housing Crisis: Interdisciplinary Policy Perspectives" October 10-11, 2008 at The University of Iowa, Iowa City, IA In many respects, events have overtaken this conference. In 2006, CRL released a study that projected 2.2 million foreclosures of subprime mortgages. [1] But by this spring, Credit Suisse...

Foreclosure Prevention Is Good Policy Excessive foreclosures of unsustainable loans are at the root of the financial crisis. Although devastating for homeowners, the impacts of foreclosures are much broader. Neighbors lose property value; municipalities lose tax revenues; and the economy loses needed purchasing power. Any solution to the current crisis, therefore, must address the problem of runaway foreclosures. While mass...

Committee: US Senate Committee on the Judiciary

Committee: U.S. Senate Committee on Banking, Housing and Urban Affairs

Summary of Bill Full Session Law This legislation creates a program within the Commissioner of Banks' office designed to reduce the number of subprime foreclosures in North Carolina. The law requires that homeowners receive at least 45 days' notice before foreclosure proceedings begin, and gives the Commissioner of Banks (COB) the authority to extend the foreclosure process an additional 30...