Following on the heels of a media blitzkrieg on the credit industry, including payday lending, credit card companies, and the subprime mortgage industry, Democratic legislators in both houses of Congress are moving forward with legislation to curtail predatory lending practices. From the NY Times article:
The provisions include requiring mortgage lenders to determine if borrowers have the financial ability to repay loans and making issuers and buyers of predatory mortgages more legally accountable.
If this can make past an extremely well-funded lending industry not keen on further regulation, it could be a great help to consumers. The statute is both remedial and preventative. On the one hand, it would give consumers the right to sue mortgage lenders who write, well, stupid loans when they should know better. On the other, I’m sure the industry will say this means consumers will take advantage of them. Of course, lenders knew very well what they were doing when they started lending to risky borrowers and they made a heckuva lot of money doing it. — SAM GLOVER