What action should be taken to achieve better results of curbing predatory home mortgage lending?


To ensure higher level of curbing predatory home mortgage lending, HUD (the US department of Home and Urban Development) has agreed on and begun to implement an official program that is aimed at severely restricting and limiting some lenders' harmful intentions. These official steps are required in order to add legislation structure to the attempts to curb predatory mortgage lending.

This is to be achieved mainly through educating loan applicants about particular risks to consider with certain loan products, adopt mortgage and predatory lending counseling on a larger scale, and require that lenders reveal the mortgage specific costs and clauses earlier in the application process.

Other steps towards curbing predatory home mortgage lending is officially declaring it harmful and requiring lenders to submit a loan-appropriateness report, especially for high cost loans; the HUD task force for curbing predatory home mortgage lending also recommends that legislation is provided to better protect borrowers in the subprime market and balloon payments and prepayment penalties are further restricted. Also, a ban on lump-sum life insurance and similar popular products is considered.

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