Predatory Lending

Miller's concern for the common man has led him to take a leadership role in unraveling and finding remedies for the subprime mortgage crisis. He lists as a key accomplishment House passage of an anti-predatory lending bill modeled after a much-praised North Carolina law. He also is working to provide help to homeowners facing foreclosure. (Editorial, The News & Record, 5/3/08)

The bright spot in the financial condition of America's working and middle class families is that 69 percent of American families own their own home. The equity that American families build in their homes by faithfully paying a mortgage year after year represents the life's savings of most homeowners.

And home ownership is more than an investment. The deed to a home is the membership card in the middle class. Families living on the fringes of poverty can begin to get their footing when they own their own home, and become part of a neighborhood where parents know their children's playmates.

But financially vulnerable homeowners are even more likely to have to borrow against the equity in their home to provide for life's rainy days.

Every homeowner faces a mountain of papers to sign when they use their home as security for a loan. Every borrower has to trust that the lender is not taking advantage of them. Too often their trust is betrayed. They find out much later that when they signed the closing papers, they signed away a big part of the equity in their home, of their life's savings.

I have introduced federal legislation based upon North Carolina's proven predatory lending law. The law forbids a variety of abusive practices, such as excessive fees and costs that get built into the loan, and it has not cut off credit for lower income borrowers.

The legislation has the support of a broad coalition of consumer and civil rights groups. (See related articles below.)

And I'm fighting against legislation supported by lenders that would pretend to protect consumers, but would really be more loophole than law, while stripping state law protections

Related article:
Miller, Watt, and Frank sponsor anti-predatory lending legislation based on landmark North Carolina solution

Source: Center for Responsible Lending
Date: March 10, 2005
Download article (57KB PDF file)

Related article:
NAACP supports congressional fight to end predatory lending

Source: NAACP Washington Bureau
Date: April 29, 2005
Download article (84KB PDF file)