Published: December 2017

Legislation lets lenders saddle consumers with predatory home mortgages

Consumer and housing advocates are pushing back against two bad bills in the U.S. House that would undermine existing homebuyer safeguards and allow lenders to issue predatory mortgage loans.

Consumer Action joined a number of housing, economic justice and consumer advocacy groups in opposing two deceptively named pieces of legislation: the Mortgage Fairness Act of 2017 (HR 2570) and the Community Institution Mortgage Relief Act of 2017 (HR 3971). Both bills would make it easier for banks and lenders to issue risky home mortgages to consumers. HR 2570 would allow lenders to evade existing rules surrounding high-cost mortgage loans and steer homeowners into abusive deals on certain mortgages (especially home equity lines of credit and construction loans). HR 3971 would allow larger lenders to make high-priced mortgages without requiring mortgagees to deposit funds in escrow to guarantee payment of taxes and homeowners insurance. (Escrow accounts help homeowners reduce the risk of mortgage default.)

Lead Organization

Americans for Financial Reform

Other Organizations

Center for Responsible Lending | Consumer Action | National Consumer Law Center

More Information

For more info on HR 3971, click here; on HR 2570, click here.

 

 

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Legislation lets lenders saddle consumers with predatory home mortgages   (HR2570PredatoryHomeMortgagesLetter.pdf)