Fairbanks Capital, Ocwen, Litton, Wells Fargo, GMAC, New Century, HomeComings, Homeside, EMC, Etc... TAKE 10 MINUTES and OPPOSE THIS BILL that will further PROTECT PREDATORY LENDERS/SERVICERS! Nationwide

TAKE 10 MINUTES! Here is YOUR chance to be heard, and oppose a bill that will TAKE AWAY the little protection a few states have against Predatory Lenders and Servicers. (A "sample letter" is provided at the bottom of this post, along with a web address to find contact information).

This post is regarding a bill called "The Responsible Lending Act" (H.R 833) submitted by Rep. Bob Ney (R-OH)

If you are unfamiliar with this bill, don't let the name of it fool you, this bill should be titled "The Loan Shark Protection Act" This bill was co-written by Wright Andrews, of the firm Butera and Andrews, which represent a coalition of subprime lenders!!

Unable to fend off the continuing grassroots campaigns against predatory lending, the subprime lenders and their Wall Street backers have joined together to push a federal preemption bill through Congress. They've united behind Rep. Bob Ney's (R-OH) bill, HR 833, mislabeled The Responsible Lending Act. Despite its title, the bill is not designed to protect consumers but to preserve the status quo for predatory lenders.

Here are some important tid bits about the Ney bill:

1. The Ney bill would invalidate all state and local laws, without providing new federal protections.The existing laws that many states have recently passed against predatory lending would be erased.....it would give the worst lenders permission to return to the most abusive practices.

2. NO LIMIT on prepayment penalties! - many states now either prohibit these 'trap' fees, or sharply limit them.
Only by limiting the financing of points and fees and the charging of prepayment penalties can predatory mortgage lending effectively be stopped.

3. Limitation on damages for violation of federal protections, and the elimination of liability for secondary-market purchasers of loans.
(If your lender sells your loan, your new lender/servicer cannot be held liable for any mistakes and/or fraud adopted by the previous lender).

4. The Ney bill would limit damages for violations of HOEPA.

5. The bill would fully legitimize yield-spread premiums - kickbacks lenders pay to brokers for jacking up borrowers' interest rates - costing homeowners billions of dollars each year

6. The Ney bill does not address the financing of points and fees. Instead the bill simply requires a new disclosure about financing points and fees. Not only would this new disclosure provide no meaningful new information to protect borrowers, but it also might serve to insulate lenders from legal challenges.

7. The coordination of class action damages with actual damages essentially eviscerates (removes) the possibility for any class actions because it is not feasible to prove actual damages in class cases.

8. The national infrastructure of HUD-certified housing counseling agencies has played a key role in getting the word out about predatory lending, helping borrowers refinance out of bad loans, and informing homeowners targeted for high-cost refinances of less expensive options. Rather than assist the efforts of these private non-profit agencies, the Ney bill would impose another layer of bureaucracy on them in the form of a new BANKING INDUSTRY DOMINATED board that would needlessly duplicate HUD's work on its Housing Counseling program. The board would standardize all materials agencies distribute on predatory lending, when many of the most effective flyers are aimed at particular populations or geared toward specific local problems. This provision of the Ney bill would be an attempt to fix a program universally recognized as a tremendous success. IT WOULD DO SO BY PUTTING THE LENDING INDUSTRY IN THE ROLE OF GOVERNMENT, WHERE IT WOULD OVERSEE A PROGRAM THAT PREDATORY LENDERS HAVE AN INTEREST IN SEEING FAIL.

9. The Ney bill's change to the language in HOEPA prohibiting negative amortization actually creates a creditor protective exception to the consumer protection already in the law.

10. The Ney bill's language on limiting interest rates on default is not as protective as the current language in HOEPA which requires actuarial methods (which are the most consumer friendly) to determine rebates of finance charges.

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Here is a "Sample Letter" to oppose the Ney bill (H.R. 833).
Copy and paste this letter, or write your own, but please TAKE 10 MINUTES, and oppose this bill!

The Lending/Servicing industry has been hard at work to have this bill passed, we need to work just as hard to have it rejected!

Use the link posted below to find contact information to the members of the House Committee on Financial Services.

Send, email, or fax your letter to the member(s) in your state, or to all of the members. Send the letter to your own representative and ask them to press the issue with the members of the committee in their party.

Take 10 minutes and oppose the Ney bill! All the information is here, please use it!

****** Sample Letter **********

Dear Representative :

I am writing to express my strong opposition to legislation Rep. Robert Ney has introduce in the 108th Congress that claims to address the predatory lending problem facing our country. "The Responsible Lending Act" (H.R. 833) would actually exacerbate some of the most damaging predatory lending problems facing our nation. Moreover, it would wipe out the only anti-predatory lending laws that exist at the present time - at the state and local level - and block the enactment of these laws in the future.

As you know, predatory mortgage lending is an exploding problem in many communities across America. Hundreds of thousands of homeowners have not only lost their homes to foreclosures, they have lost the primary source of savings - their home equity - to unethical mortgage lenders.

Major problems with this bill include:

1. Does not curb the most egregious predatory lending practice: the financing of high points, fees, and prepayment penalties.

2. Includes total and complete preemption of all state and local consumer protection provisions that have proven to be very successful in many states.

3. Eliminates assignee liability for high-cost loans. This means that lenders who buy predatory loans would not be responsible for the illegal aspects of the loan.

4. Significantly reduces consumer remedies and damages for violations such that lenders would suffer no consequences for violating the law.

I recognize that changes in federal law are necessary to stop predatory lending across the nation, and I strongly endorse efforts to create meaningful federal law, which would address the real problems. I do not believe the proposal by Congressman Ney will address the predatory lending problems facing our country and in fact, undermines existing statutes and any future attempts by state and local legislators to protect consumers from predatory lenders.

Sincerely,
(Name & Address)


Use this web address to find contact information to the members of the House Committee on Financial Services. Tell them to so NO to the Ney bill!!

http://financialservices.house.gov/members.asp?comm=3


staff - Consumer Advocate
Tempe, Arizona
U.S.A.