Borrower beware: equity strippers are preying on elderly homeowners
While most subprime home equity lenders provide a valuable service for marginally creditworthy borrowers, certain disreputable lenders are engaging in more predatory lending practices. Equity strippers target elderly homeowners who are often cash poor but equity rich. These predatory lenders often convince lower-income elderly homeowners to take in high rate, high fee, second mortgages which ultimately lead to foreclosure. Luxman Nathan of the Federal Reserve Bank of Boston highlights some of the techniques used by equity strippers and what regulatory and legal options are available for ...
Predatory lending: attempts to plug the money drain
Abusive lending practices have made headlines around the nation, and the issue remains hotly debated. Stephen O'Sullivan gives an overview and an update on the issue. He focuses on how various regulators and legislators are trying to curb abuses without limiting access to the subprime market.
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.
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.
The law and economics of remedies of predatory lending
States fight predatory lending in different ways
As the laws vary from state to state, so does their impact. In some states, the high-cost mortgage business appears to have shrunk. But in other states, the opposite has occurred.
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.
Understanding the securitization of subprime mortgage credit
In this paper, we provide an overview of the subprime mortgage securitization process and the seven key informational frictions that arise. We discuss the ways that market participants work to minimize these frictions and speculate on how this process broke down. We continue with a complete picture of the subprime borrower and the subprime loan, discussing both predatory borrowing and predatory lending. We present the key structural features of a typical subprime securitization, document how rating agencies assign credit ratings to mortgage-backed securities, and outline how these agencies ...