Calls out bill advocates for policies that would harm Ohio homeowners
WASHINGTON, D.C. – April 16, 2015 – (RealEstateRama) — Congresswoman Marcy Kaptur voted against legislation that passed in the House last night to raise interest rates on homeowners and expose many consumers to predatory lending practices that are currently prohibited by the Consumer Financial Protection Bureau (CFPB). These Republican proposals, H.R. 650 and H.R. 685, would reclassify certain types of manufactured housing to allow real estate and financial services companies to push their customers into predatory and high-cost lending and insurance.
“This legislation seeks to expose Americans to insidious and predatory lending practices that can lead to financial ruin and at times leave folks homeless,” said Kaptur. “Our national consumer protection agency prohibited these practices because they set customers up to fail and then leave them with no choice but to spend years fighting to regain control of debt and credit. These loans are not competitive and only continue to exist because consumers in Ohio and throughout the country are steered into them. Financial schemes like these have no place in a responsible marketplace. It is offensive that Republican lawmakers want to expose the poorest and most vulnerable Ohio and U.S. consumers to the unjust and unfair levels of risk that come with these loans and insurance policies.”
CFPB originally set up current protections to solve a long-standing problem in the real estate industry in which realtors, mortgage brokers and financial institutions had a financial incentive to steer home buyers toward loans and title insurance coverage that would overcharge them.
The Center for Public Integrity and The Seattle Times published a joint investigative article looking into a major provider of “higher-priced” loans of the type addressed by this legislation. It found “a consistent array of deceptive practices that locked [customers] into ruinous deals: loan terms that changed abruptly after they paid deposits or prepared land for their new homes surprise fees tacked on to loans; and pressure to take on excessive payments based on false promises that they could late refinance.”
Opponents of one or both bills include Americans for Financial Reform, Consumer Federation of America, Center for Responsible Lending, National Consumer Law Center, NAACP, National Fair Housing Alliance, The Leadership Conference on Civil and Human Rights, National Association of Independent Land Title Agents, the Center for Responsible Lending, Capital Impact Partners, Corporation for Enterprise Development, Fair Mortgage Collaborative, Housing Assistance Council, National Consumer Law Center and the National Manufactured Home Owners Association. The White House Statement of Administration Policy on this legislation states that the President’s senior advisors have recommended a presidential veto if the bills pass in both houses of Congress.