The National Consumer Law Center wants more from the government. In addition to discussing better ways of enforcing existing laws meant to protect borrowers, the conference will try to find ways to better spend money already earmarked for enforcement, according to Courson. When the borrower goes to refinance, he is charged additional fees by the lenders, Saunders said.įoreclosures on homes have increased by 500 percent over the last 20 years, with subprime borrowers defaulting eight times more than their counterparts, Saunders said.Ĭourson said the mortgage bankers will invite a wide variety of agencies, including the Treasury, the Department of Justice and the Federal Trade Commission, to the upcoming conference. Flipping occurs when lenders roll higher fees and points into the loan so the borrower will have to refinance. Some predatory practices like flipping are legal, Saunders said. Unscrupulous lenders mislead homeowners about the costs of the loans, charge more than was agreed to, falsely report a borrower's income, or trick buyers into loans with payments they can't afford, said Margot Saunders, managing attorney for the National Consumer Law Center. The practice is called predatory lending. Unscrupulous tacticsįraud in mortgage banking sometimes occurs when the borrowers are charged higher rates or additional fees than they might normally qualify for. The group also called on Congress to hold hearings on its solutions to abusive lending, like better enforcement of existing laws and a simpler mortgage process.īorrowers with low income or bad credit generally are charged higher interest rates for their home loans, which are called subprime loans. "MBA is hosting this summit to find ways in which we can work with enforcement agencies to achieve our common goal of protecting consumers."
"Families should be able to pursue their dream of homeownership without fear of predators," said John Courson, chairman of the Mortgage Bankers Association of America.
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