Installment loans Delaware

Expanding the universe of prime borrowers would help to curb predatory lending.

Moreover, the Federal Reserve Board installment loans Delaware should utilize the authority it has under the Gramm-Leach-Bliley Financial Modernization Act to conduct examina- 177 tions of subprime lenders that are subsidiaries of bank holding companies where it believes that such entities are violating HOEPA or otherwise engaging in predatory lending. Improving Loan Data installment loans Delaware installment loans Delaware on Subprime Lending Despite the explosive growth in subprime mortgage lending over the past several years, there is no consistent, comprehensive source of data on where those loans are being made geographically, by which lenders, and to what types of borrowers. In truth, the data collection requirements of the Federal Government have failed to keep up with these trends. Virtually all of the research to date is based on a list of subprime lenders com- piled, on his own initiative, by an installment loans Delaware enterprising researcher at HUD. The Federal Re- serve Board, HUD, and other Governmental agencies, as well as lenders, academics use this list, and anyone else interested in the field. Lenders on the list are classi- fied as subprime if they identify themselves as such. All loans reported by those lenders are counted as subprime, and no loans reported by lenders that do not iden- tify themselves as subprime are counted.

Further, HUD is under no mandate to compile this list, and should it cease to do this, there would be virtually no future information available about where and to whom they are going. This is the best in- formation available on subprime lender, and nobody thinks that it serves the need adequately.

The Federal Reserve Board has proposed to amend the Home Mortgage Disclosure Act regulations (with which this information about subprime lenders is combined). The proposal would also revise the rules to ensure that some large, nondepository subprime lenders, not currently covered under HDMA, would be required to submit annual reports on their loan activities. Unfortunately, the Fed has yet to finalize these rules. Accordingly, Congress should adopt legislation requiring more systematic report- ing by lenders under HMDA on their subprime lending activities. In addition to re- vising ECOA, the LaFalce bill (H. It also provides HUD with the necessary authority Iowa no faxing loans to impose civil money penalties to enforce compliance with HMDA by non- depository lenders, similar to the authority banking regulators have for banks and thrifts. The lack of reporting by many Michigan small dollar loans nonbank financial institutions has hindered the ability of regulators to track lenders that may engage in abusive lending. Pro- viding HUD with the necessary statutory authority in this area also would establish a more level playing field between depository and nondepository mortgage lenders.

We believe no credit check loans North Dakota that similar legislation should be introduced in the Senate as well. The Federal Government Should Take Steps to Prevent the Secondary Market From Supporting Predatory Lending Ultimately predatory lending could not occur but for the funding that is provided by the secondary market to finance these loans.

The rapid rise in subprime lending that has occurred in recent years was possible because many of these loans were purchased in the secondary market either whole or through mortgage-backed securi- ties (about 35 percent of subprime loans by dollar volume in 1999 was securitized). While the secondary market to some extent has been part of the problem con- nected with predatory lending, it can become an important part of the solution. The refusal by the secondary market to purchase or securitize loans with abusive fea- tures, or to conduct business with lenders that originate such loans could curtail their liquidity and thus, reduce their profitability. Last year, Fannie Mae and Freddie Mac, the two Government sponsored housing enterprises, pledged not to buy loans with predatory features. HOEPA provides that pur- chasers or assignees of mortgages covered by that statute are liable for violations unless ordinary due diligence would not reveal them as such. Similarly, Section 805 of the Fair Housing Act makes the secondary market potentially liable for financing discriminatory loans.

However, because HOEPA loans represents such a small share of the highcost loan market and discrimination claims are difficult to prove, these developments have not yet resulted in across the board vigilance and screen- ing by the secondary market that makes an impact by constricting the funding installment loans Delaware pipe- line for predatory lenders. Expanding HOEPA coverage to a greater share of the market and clarifying that parent companies are liable for the sins of their subprime affiliates (a provision con- tained in the Sarbanes and LaFalce bills) could encourage loan purchasers to de- velop the necessary due diligence to filter out abusive loans from their business ac- tivities.

Unfortu- nately, some of the subprime lenders acquired by these giant entities are being sued or otherwise have been exposed for their connection to predatory lending practices. Establishing that parent companies and officers of lenders, or subsequent holders of loans by contractors, or liable for the predatory practices of originators would en- courage these mega-financial institutions to develop installment loans Delaware the necessary internal controls to deter abusive loan practices. We urge this Committee and the Congress to move decisively in the areas we have identified. It will take such comprehensive action by the Federal Government to curb the predatory lending problem. Chairman for the opportunity to provide our views on this subject. Sarbanes Chairman Committee on Banking, Housing and Urban Affairs U.

Chairman: Household International would like to take the opportunity to respond to the testimony provided today by two witnesses, Mr.