1 / 7

Predatory Lending Symposium

Predatory Lending Symposium . Federal Home Loan Bank of Boston Regional Perspective June 12, 2007. Federal Home Loan Bank of Boston. Federally chartered corporation created by Congress in 1932 Government-sponsored enterprise and is privately capitalized

carrie
Download Presentation

Predatory Lending Symposium

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Predatory Lending Symposium Federal Home Loan Bank of Boston Regional Perspective June 12, 2007

  2. Federal Home Loan Bank of Boston • Federally chartered corporation created by Congress in 1932 • Government-sponsored enterprise and is privately capitalized • Mission is to serve the residential-mortgage and community-development activities of member financial institutions in the New England region • Allocates 10 percent of net earnings to the creation and preservation of affordable housing

  3. Community Lending Programs • The Bank meets the needs of its members and communities by implementing the: • Affordable Housing Program which provides grants and subsidized financing for homeownership and rental housing for very low-income households • Equity Builder Program which provides down-payment and closing cost assistance to income eligible households to purchase a home • Community Development Advance which provides subsidized financing for community economic development initiatives including small businesses, schools, affordable housing, and social-service or public facility agencies • Education and Outreach programs by meeting with local community banks and neighborhood leaders to determine viable solutions

  4. Anecdotal Regional Observations • On a regional basis, the following has been observed: • That foreclosures in New England are rising, primarily as a result of sub prime and predatory lending • The sluggish housing market is slowing house appreciation, and in some cases, property values are declining, which is further exacerbating the foreclosure problem • The current mortgage product mix is changing from conventional 30 year fixed rate loans to more exotic adjustable rate options • The proliferation of mortgage products featuring changing mortgage payments that are tied to a specific index and start with low “teaser” rates

  5. Anecdotal Regional Observations • In addition, • Lending based on foreclosure value of properties, rather than the borrower’s ability to pay • Fraudulent concealment of the true nature of a mortgage from the borrower • Inducing borrowers to repeatedly refinance in order to generate high points and fees

  6. Implications • Regional implications from sub prime and predatory lending include: • The destabilization of communities • Massive losses in homeownership that is setting hard-working families back • Cause economic hardship in communities and for individuals

  7. Regional Responses • The following regional responses have been observed: • The development of financial literacy and mentorship programs that alert consumers to predatory lending • The development of “rescue” loan programs to refinance existing borrowers that are in predatory loans • Increased education and outreach campaigns • Increased pressure from state and federal lawmakers to modify current lending practices – several states have introduced bills • FHLB member banks working with victims of predatory loans

More Related