Bob Menendez: “I wish to address one of the largest problems plaguing our home buyers today; that is, predatory lending. Over the past…”

“I wish to address one of the largest problems plaguing our home buyers today; that is, predatory lending. Over the past few days, the Wall Street Journal has written a number of articles about abuses in the subprime lending industry prompting a much needed crackdown on dishonest practices and deceitful lending. In addition, on Tuesday, the Mortgage Bankers Association reported that the number of new foreclosures reported during the fourth quarter of 2006 reached the highest level in 40 years. Not surprisingly, foreclosure and delinquency rates were highest among subprime lenders. Mr. President, enough is enough. The recent scandal at the New Century Financial Corporation, one of the largest subprime lenders, is a final straw. As the Wall Street Journal describes in one instance, an elderly woman was struggling to make her $952 monthly mortgage payments when a mortgage broker called and offered her a 'senior citizen's loan' from New Century Financial. They told her she wouldn't need to make payments for years. Well, she didn't get years. Instead, her monthly payment skyrocketed to $2,200 per month, more than double her income. With the assistance of a lawyer, she escaped foreclosure, but many others are not as fortunate. This is a prime example of the consumer exploitation occurring in subprime lending, and it is simply unacceptable. Unfortunately, there are many more examples. Unscrupulous predatory lenders prey upon the innocent and unsuspecting.”