With foreclosures spiking, home values sinking, and the economy slipping, U.S. PIRG has thrown our support behind a set of proposals designed to prevent future mortgage meltdowns.
“There’s a lot of blame to go around—from lending institutions using aggressive and sometimes abusive practices, to Wall Street ratings agencies turning a blind eye to risky mortgage-backed securities, to borrowers biting off more than they can chew,” said Steve Blackledge, our chief advocate on the issue.
“We’re working to establish fair rules that limit the types of unsafe lending that triggered the meltdown in the first place.”
In Oregon, Colorado, California and at the federal level, we are working to pass laws that would require lenders to fully disclose the costs of mortgages and to honestly assess the capacity of borrowers to repay. These changes would also prohibit lenders from steering borrowers into high-fee, high-interest rate loans when they have the ability to qualify for prime loans.
Lobbyists for the influential National Association of Mortgage Brokers have resisted even these modest steps, however. U.S. PIRG is organizing grassroots action to counter the lenders.
