NAR supports efforts to curb predatory lending

The National Association of Realtors has called on members of the U.S. Senate Banking Committee to find solutions to end predatory lending in the mortgage industry. According to a NAR news release, the organization made the request in a letter submitted for the record during hearings in which victims of lending abuse and mortgage industry leaders both testified.

The letter stated the association's opposition to abusive or predatory lending practices that deceive homeowners about the true nature of the loan and result in the stripping of equity, diminished personal credit standing, or violations of federal or state consumer protection statutes and regulations. It notes that the majority of predatory lending victims are women, the elderly and minorities.

The letter read, "As an association, NAR is working hard to break down the barriers to homeownership, especially those facing minority populations. Minority home buyers are significantly more likely than white home buyers to use FHA or higher-cost subprime loans when buying a home. This underscores the need for a healthy subprime market. Taking steps to tighten the lending rules for these loans in order to protect the consumer is an admirable goal. The challenge will be to craft a solution that will successfully decrease the opportunities for unscrupulous behavior while at the same time preserve the availability of credit for subprime borrowers. We look forward to working with you to find that balance."

The letter also stated that seeking solutions to predatory lending is consistent with NAR's overall public policy priorities. "Every day, Realtors work hard to build strong communities and a better America by assisting families and individuals in their pursuit of the American dream of homeownership," it said. "We are committed to preserving and promoting federal mortgage finance and assisted housing programs to help close the gap in homeownership rates for minorities and to meet the demand for affordable rental housing."

It continued, "Realtors spend countless hours putting people in homes. We would like to see them stay there and not be the victims of actions that ultimately result in foreclosure and financial ruin. We congratulate you again for holding these hearings on the growing problem of predatory lending and look forward to being part of the solution."