Predatory/Subprime Lending

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Predatory lending occurs when a lender uses unfair, deceptive, or fraudulent practices when selling a loan to a consumer. Borrowers are steered toward unaffordable loans, or charged higher fees or interest rates than those they qualify for. Subprime mortgages are generally defined as higher-cost home loans made to borrowers with less-than-ideal credit.

The civil and human rights communities had long expressed concern about predatory lending because these practices disproportionately targeted racial and ethnic minority borrowers, robbing them of their homes and their chief wealth-building asset. Today, predatory lending is one of the greatest threats to families working to achieve financial security.

Consumer Resources

8 Signs of Predatory Lending - Center for Responsible Lending
Tips for Avoiding Mortgage Modification Scams and Foreclosure Rescue Scams - Treasury Department
Don't Be A Victim Of Loan Fraud: Protect Yourself from Predatory Lenders - Dept. of Housing & Urban Development
Recommendations for Consumers - ACORN

Fact Sheets

Subprime Mortgage Fact Sheet - Center for Responsible Lending
Predatory Lending Practices - ACORN
Continued Decay and Shaky Repairs: The State of Subprime Loans Today - Center for Responsible Lending - January 2009
State-by-State Information on Predatory Lending - Dept. of Housing & Urban Development

LCCR Testimony

Ending Mortgage Abuse: Safeguarding Homebuyers - Wade Henderson before the Senate Subcommittee on Housing, Transportation, and Community Development - 6/26/07
Predatory Lending and Abusive Mortgage Lending Practices - Wade Henderson before the Senate Committee on Banking, Housing, and Urban Affairs - 7/27/01

Reports

Unequal Opportunity Lenders? Analyzing Racial Disparities in Big Banks’ Higher-Priced Lending - Center for American Progress - September 2009
Assessing the Double Burden: Examining Racial and Gender Disparities in Mortgage Lending (pdf) - National Council of Negro Women & National Community Reinvestment Coalition - June 2009
Through Boom and Bust: Minorities, Immigrants and Homeownership - report - Pew Hispanic Center - May 2009
Putting an End to Predatory Lending in Minority and Latino Communities - National Council of La Raza - April 2009
Predatory Profiling: The Role of Race and Ethnicity in the Location of Payday Lenders in California - Report - Center for Responsible Lending - March 2009
Access Denied: Some Families Face Barriers to Credit - Report - Center for American Progress - August 2007
The Subprime Market: Wealth Building or Wealth Stripping for Older Person - AARP - June 2007
Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners - Center for Responsible Lending - December 2006
Unfair Lending: The Effect of Race and Ethnicity on the Price of Subprime Mortgages - Center for Responsible Lending - May 2006
The Best Value in the Subprime Market: State Predatory Lending Reforms - Center for Responsible Lending - February 2006
Complying with Laws against Predatory Lending Costs Lenders About One Dollar per Mortgage - Center for Responsible Lending - July 2005
Jeopardizing Hispanic Homeownership: Predatory Practices in the Homebuying Market - National Council of La Raza - May 2005
The Broken Credit System: Discrimination and Unequal Acces to Affordable Loans by Race and Age: Subprime Lending in Ten Large Metropolitan Areas (pdf) - Report - National Community Reinvestment Coalition - 12/01/03

More Information from LCCR

Supreme Court Hears Arguments in Case about States' Right to Enforce Fair Lending Laws Against National Banks - 4/28/09
New Public Service Announcements Aimed at Protecting Consumers from Predatory Lending - 09/30/08
Minorities Often Pay More for Mortgages, Study Says - 8/14/08
New Lending Rules Represent Small Step Forward, But Giant Leaps Still Needed - 7/21/08
Federal Action on Subprime Mortgage Crisis - 12/18/07
Congress Begins Addressing Subprime Mortgage Fallout - Civil Rights Monitor - Winter 2007
Minorities Discriminated against in Credit Markets, Study Finds - 08/29/07
LCCR Urges Close Scrutiny of Federal Reserve Nominees, in Light of Subprime Mortgage Crisis - 07/30/07
Senate Subcommittee Eyes Reform of Subprime Home Lending Industry - 07/15/07
Foreclosure Moratorium Needed Now, Say Civil Rights Groups - 4/11/07
National Civil Rights Groups Call for Immediate Moratorium on Foreclosure Resulting from Risky Subprime Loans - 04/04/07
Civil Rights Groups Laud New Mortgage Lending Standards - 2/28/07
Civil Rights Coalition Applauds Freddie Mac's Decision to Stop Underwriting Risky Subprime Loans - 02/27/07
Civil Rights Organizations Call for Anti-Predatory Lending Legislation - Civil Rights Monitor - Fall 2006
New Report Finds that Minorities Are Targeted for Higher-Rate Mortgage Loans - 6/12/06
Coalition Calls for Predatory Lending Legislation to Protect Minority Homebuyers - 04/25/06
Letter to Congress on Predatory Mortgage Lending - 04/24/06
Freddie Mac Makes Move to Reduce Predatory Lending - 12/09/03
National Fair Housing Alliance and Ad Council Team Up to Fight Predatory Lending - 04/29/03
Predatory Lenders Target Minorities, Regardless of Income - 05/10/02
Housing Discrimination, Predatory Lending Complaints Rose in 2001 - 4/10/02