Study Finds Rampant Predatory Lending
The Nevada Department of Banking released a study on mortgage foreclosures in Nevada Wednesday that found predatory lending in the state is wreaking havoc with homeowners. The study, found that Nevada had one of the highest foreclosure rates in the nation from so-called subprime loans made to people with impaired credit, who are often located in the poorest communities. Although subprime lending is legal and necessary for the flow of credit into poor neighborhoods, consumer groups say the subprime market is often rife with fraud and abuse since subprime borrowers have nowhere else to turn for loans.Consumers can get more information about predatory lending and a legal remedy at: http://mortgage-home-loan-bank-fraud.com/articles/predatory_lending_claims_available_in_foreclosure.htm
Nevada ranked ninth in the nation for prime loan foreclosures and fourth with subprime foreclosures.
The study by the Reinvestment Fund found that in 2002, 9.9 percent of all loans originated in Nevada were made by subprime lenders. However a vast majority of all sampled loans in foreclosure -- 60 percent to 75 percent -- were originated by subprime lenders. Foreclosure filings outpaced home ownership and housing development rates in every county studied. Equally troubling, was the fact that state foreclosures were typically concentrated in areas with modest incomes and higher minority populations. The Department of Banking's "Losing the American: A Report on Residential Mortgage Foreclosures and Predatory Lending Practices in Nevada," also showed reasons for concern, Secretary Bill Smith said. "Our study revealed reasons for much concern in the state -- predatory lending practices happen every day and we have one of the highest foreclosure rates in the nation," he said. The Department of Banking released a series of action steps and recommendations for the state, including building up the department's enforcement capabilities. The department also wants the General Assembly to strengthen existing lending and real estate laws to better protect consumers. And it wants the state to expand its educational programs for consumers and homeowners. The Banking Department wants to adopt new policies that will increase its authority to oversee mortgage lenders, and it wants to institute a voluntary "best practices" program for the state mortgage industry to follow. The department also wants to be able to license individuals who sell mortgages. Currently, only mortgage companies need licenses. At a minimum, the state should design and enforce laws and regulations to protect consumers from predatory lending practices, the TRF report recommended. The report suggested financial education for state consumers to enable them to make informed decisions about debt and personal finances.
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