Predatory Lending

Residents pleaded last night with Mayor Martin O'Malley and housing officials to crack down on slum landlords and predatory lenders who have left them paying for dilapidated homes that fail to meet the housing code. O'Malley and Housing Commissioner Patricia J. Payne met at Barclay Recreation Center with about 100 members of the Association for Community Organizations for Reform Now (ACORN), a civic group that represents low- and moderate-income families. ACORN is asking the city to adopt new laws to make available the list of properties registered by landlords and prevent lenders from preying on the unsuspecting poor by renting or selling woeful properties at market rates.

Consumer advocates welcomed a federal effort aiming to prevent predatory mortgage lending at a town hall in Baltimore on Thursday, but expressed worries that new rules would not halt discrimination. The Consumer Financial Protection Bureau unveiled a rule to be imposed a year from now that would require mortgage lenders to document and verify that a borrower will be able to repay a loan. The policy is intended to prohibit so-called "no-doc" and "low-doc" loans that were common during the housing boom.

The Federal Trade Commission filed a lawsuit in federal court yesterday accusing a finance company that is now part of Baltimore-based CitiFinancial Corp. of widespread predatory lending practices and seeking hundreds of millions of dollars in refunds. The FTC named The Associates First Capital Corp., along with Citigroup Inc., which bought the company last year for $31.1 billion and folded it into CitiFinancial, its consumer lending arm. CitiFinancial also was named in the suit. Just last month, Baltimore pledged about $12 million in incentives for CitiFinancial to expand its headquarters at 300 St. Paul Place.

In its editorials and Dan Rodricks columns, The Sun continues to emphasize and underscore the big lie that banks or "predatory lenders" were the cause of the housing crash ("What took so long?" Jan. 26). "Predatory lending" is a term of relatively recent vintage, since prior generations tended to hold individuals responsible for the greed and ignorance that drove irresponsible decision-making. Far better to investigate Fannie Mae and Freddie Mac and Rep. Barney Frank for creating a bubble based on the idea that everyone should own a home.

WASHINGTON -- Calling Baltimore "one of the worst manifestations in the country" of "predatory lending," the Clinton Administration's top housing official unveiled a nationwide reform effort yesterday. Andrew M. Cuomo, secretary of Housing and Urban Development, said a national task force -- which includes Baltimoreans Vincent P. Quayle, head of St. Ambrose Housing Aid Center, and Ken Strong, who heads the South East Community Organization -- would be given eight weeks to examine the problem and produce recommendations that can be turned into legislation.

A federal court judge on Wednesday dismissed Baltimore's landmark lawsuit against Wells Fargo & Co., saying it was "not plausible" that the mortgage giant triggered millions of dollars in damages, as the city claimed, by causing increased foreclosures through racist, predatory lending. "The alleged connection is even more implausible when considered against the background of other factors leading to the deterioration of the inner city," U.S. District Judge J. Frederick Motz explained in a six-page memorandum opinion accompanying the dismissal order.

Advocates for the poor and a city businessman joined forces yesterday in opposing the city's proposed use of $3 million to help a company accused of predatory lending build a garage downtown. At a City Council budget committee hearing, members of the Association of Community Organizations for Reform Now protested the construction of the garage in the 200 block of St. Paul Place so that CitiFinancial would retain its headquarters in the city. The lawyer for businessman David Kornblatt also argued against the garage, saying it would be environmentally unsound and an "economic disaster."

Federal banking data show that Baltimore African-Americans seeking home loans are rejected at a rate two times higher than white applicants, a report issued this week by a national civic group has found. The Association of Community Organizations for Reform Now (ACORN) said federal loan reports show only 7 percent of banks' home loans went to city neighborhoods with minority populations of 50 percent or more. The six-page ACORN report, based on federal loan figures, concludes that the practice has resulted in a rise in more mortgage companies preying on Baltimore's poor by charging them, in some cases, more than double the interest rates of conventional mortgages.

When Washington implemented an anti-predatory lending law in September, it did more than stop fraudulent mortgage lending in the city. It stopped just about all lending outside the prime market. Mortgage lenders say the law - which was suspended in November and is expected to return in some form this month - put too many burdens on legitimate lenders and further complicated the byzantine mortgage transaction. Lenders also said they were afraid to lend when they weren't sure what practices and loan products could get them into trouble.

Fewer homeowners in Maryland and the nation fell behind on their mortgage payments during the last three months of last year, marking the best showing in almost four years, resulting from a slowly improving economy, according to a new survey by the Mortgage Bankers Association. Nationally, the seasonally adjusted percentage of mortgage payments that were 30 days or more past due fell to 4.49 percent in the fourth quarter, down from 4.65 percent during the previous three months. It was the lowest rate since the second quarter of 2000.

In this week's State of the Union address, President Obama announced to cheers the formation of a new Justice Department unit tasked with going after the big banks and mortgage companies whose reckless lending led to the collapse of the housing market and caused millions of Americans to lose their homes through foreclosure. The bursting of the housing bubble deepened the recession that began in 2007, and it continues to drag down the economy's recovery. It's about time the people responsible for this mess were held to account.

After two previous dismissals, the city made a third attempt this week to sue Wells Fargo Bank, accusing the company of causing increased foreclosures in Baltimore through racist, predatory lending. The latest complaint, filed Thursday in U.S. District Court, contains 14 new paragraphs that purport to address concerns that led Judge J. Frederick Motz to twice before dismiss the case — namely a lack of evidence that the mortgage lender was responsible for housing vacancies and millions of dollars in associated damages.

A federal court judge on Wednesday dismissed Baltimore's landmark lawsuit against Wells Fargo & Co., saying it was "not plausible" that the mortgage giant triggered millions of dollars in damages, as the city claimed, by causing increased foreclosures through racist, predatory lending. "The alleged connection is even more implausible when considered against the background of other factors leading to the deterioration of the inner city," U.S. District Judge J. Frederick Motz explained in a six-page memorandum opinion accompanying the dismissal order.

A federal court judge on Wednesday dismissed Baltimore's landmark lawsuit against Wells Fargo & Co., saying it was "not plausible" that the mortgage giant triggered millions of dollars in damages, as the city claimed, by causing increased foreclosures through racist, predatory lending. "The alleged connection is even more implausible when considered against the background of other factors leading to the deterioration of the inner city," U.S. District Judge J. Frederick Motz explained in a six-page memorandum opinion accompanying the dismissal order.

Predatory lending in city just a conspiracy theory First, Wells Fargo is accused of redlining. Perhaps they wanted to stay away from high risk loans? Now it is predatory lending practices ("The suit must go on," June 30). Perhaps they were "encouraged" to do so by the Fed's policies? No one forced the folks receiving the loans to sign the documents. It was incumbent upon those receiving the loan to review the terms and conditions. Many chose the subprime loans because they didn't have to provide proof of income.

Here are excerpts from a speech on the nation's foreclosure crisis delivered by James H. Carr, chief operating officer of the National Community Reinvestment Coalition, at an April 3 symposium at the University of Baltimore School of Law, co-sponsored by Baltimore Neighborhoods Inc. Foreclosure is the death of an important American dream - the dream of homeownership. It's a financial death for many families, often leading them to financial ruin. It's also a death of the prospect of passing significant wealth to children.

Here are excerpts from a speech on the nation's foreclosure crisis delivered by James H. Carr, chief operating officer of the National Community Reinvestment Coalition, at an April 3 symposium at the University of Baltimore School of Law, co-sponsored by Baltimore Neighborhoods Inc. Foreclosure is the death of an important American dream - the dream of homeownership. It's a financial death for many families, often leading them to financial ruin. It's also a death of the prospect of passing significant wealth to children.

In its editorials and Dan Rodricks columns, The Sun continues to emphasize and underscore the big lie that banks or "predatory lenders" were the cause of the housing crash ("What took so long?" Jan. 26). "Predatory lending" is a term of relatively recent vintage, since prior generations tended to hold individuals responsible for the greed and ignorance that drove irresponsible decision-making. Far better to investigate Fannie Mae and Freddie Mac and Rep. Barney Frank for creating a bubble based on the idea that everyone should own a home.

SANTA ANA, Calif. -- Soledad Aviles dreamed for years of owning a home, with a plot of land where he could grow corn and chiles as he did in his native Mexico. So he felt blessed last year when he learned he could buy a three-bedroom, single-story stucco house on West La Verne Avenue in Santa Ana. Referred to a local loan broker by a trusted friend, he borrowed the entire purchase price of $615,000 from Washington Mutual at a high interest rate typical of subprime loans. The monthly payment, as he says he understood it, would be $3,600 - steep for a glass cutter who made $9 an hour - but Aviles counted on his wife and three of his six daughters, who also worked low-paying jobs, to contribute.

As more Americans default on home loans, federal regulators and members of Congress are looking to place new restrictions on mortgages for people with shaky credit, a move that could make it harder for many people to buy homes or refinance their mortgages. Government officials on Friday issued for public comment proposals to address problems that have rattled the mortgage-lending industry and left growing numbers of people in homes they cannot afford. These measures call on lenders to exercise caution in making such loans and to closely evaluate borrowers' ability to repay them.