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Subprime Loans Subject of Latest Hearing…

The Center for Responsible Lending released a news briefing this week about the Senate Committee on Banking, Housing, and Urban Affairs conducting investigative hearings on the predatory lending and the flood of home foreclosures that have resulted.

The current combination of lax regulations for loan underwriting and absence of fiduciary duties for lenders is devastating the low-income families of our state that are simply trying to improve their lives.  Subprime loans feature "exploding" adjustable-rates, which become unaffordable to the susceptible low-income persons, resulting in more and more foreclosures.  In his testimony, Martin Eakes, Director of CRL, pointed out that only 13% of all outstanding mortgages are subprime loans, but over 60% of loans in foreclosure are subprime.  These lending practices plague North Carolina, and present a real civil rights issues as well, since African and Latino Americans receive the highest share of subprime loans.   Read more…

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