Search Results
Journal Article
Predatory lending—a grassroots perspective
Iowa Citizens for Community Improvement (CCl) is a multiissue, statewide nonprofit organization with a 28-year history and nearly 2,000 dues-paying members. CCI was founded in 1975 in Waterloo, Iowa, by people who wanted to address local problems and improve their community. Since then, CCI has expanded to include urban members from Des Moines and family farmers and other rural citizens from across the state. Iowa CCI?s purpose is to empower and unite grassroots people of all ethnic backgrounds to address problems in their community and win positive social, economic, and environmental justice.
Journal Article
Making a difference in Chicago neighborhoods
Started almost 30 years ago by housing advocates to improve declining Chicago neighborhoods. Neighborhood Housing Services of Chicago (NHS) has into one of the most succesful and respected organizations of its kind in the U.S. A key to its sucess has been the ability to enlist the support of both neighborhood residents and to corporate, lending, and regulatory and political leaders in efforts to revitalize city neighborhoods. These relationships have allowed it to craft innovative homeownership opportunities for working families while responsibly leveraging public and private sector ...
Working Paper
Predatory lending in rational world
Regulators express growing concern over ?predatory lending,? which we take to mean lending that reduces the expected utility of borrowers. We present a rational model of consumer credit in which such lending is possible, and identify the circumstances in which it arises with and without competition. Predatory lending is associated with imperfect competition, highly collateralized loans, and poorly informed borrowers. Under most circumstances competition among lenders eliminates predatory lending.
Journal Article
Who has the authority to regulate predatory lending?
An investigation of who has the authority to address predatory lending in the Fourth Federal Reserve District. Regulatory agencies, including the Federal Reserve, are concerned about abusive lending practices that may be corroding some of the positive impacts of CRA-related lending in low- and moderate-income neighborhoods over the last decade.
Working Paper
The impact of local predatory lending laws
Local authorities in North Carolina, and subsequently in at least 23 other states, have enacted laws intending to reduce predatory and abusive lending. While there is substantial variation in the laws, they typically extend the coverage of the Federal Home Ownership and Equity Protection Act (HOEPA) by including home purchase and open-end mortgage credit, by lowering annual percentage rate (APR) and fees and points triggers, and by prohibiting or restricting the use of balloon payments and prepayment penalties. This paper provides a detailed summary of various local predatory lending laws ...
Journal Article
Default rates on prime and subprime mortgages: differences & similarities
For the past several years, the news media have carried countless stories about soaring defaults among subprime mortgage borrowers. Although concern over this segment of the mortgage market is certainly justified, subprime mortgages only account for about onequarter of the total outstanding mortgages in the United States. The remaining 75 percent are prime loans that are made to borrowers with good credit, who fully document their income and make traditional down payments. While default rates on prime loans are significantly lower than those on subprime loans, they are also increasing ...
Journal Article
Income inequality: time for predatory lending laws?
States that have adopted laws against such lending had higher than average levels of income inequality over the past 10 years than did states that didn't pass such laws.
Journal Article
Fighting home equity fraud and predatory lending: one community's solution
This special issue, CR Report, focuses on one community's efforts to fight home equity fraud and predatory lending.