NTIC Director of Research David Rose was invited to testify at the Federal Reserve Board’s hearings on predatory lending on June 6.

The Board held public hearings to gather information and look at the impact of the 2002 Home Owners Equity Protection Act (HOEPA) revisions. Lenders, investment banks, legal assistance organizations, housing counselors and community advocates were invited to testify on various panels regarding the impact of these regulation changes.

Speaking about the impact predatory lending has on communities and the value homeownership counseling adds to the fight against this problem, Rose said, “The arguments for consumer education often blame the borrower. The arguments suggest that if the borrower had known more they wouldn’t have agreed to such a lousy loan. Often, the real mistake the borrower made is to take the advice of a real estate or finance professional that did not have their best interests at heart.”

Congress enacted HOEPA in 1994 as an amendment to the Truth in Lending Act. The law was an attempt to protect consumers from predatory lending practices in low- to moderate-income communities, where some lenders make high rate and high fee loans to low- to  moderate-income homeowners. Under HOEPA, creditors are required to identify high-cost mortgages, provide enhanced disclosures and comply with restrictions on loan terms.

David Rose, left, testified at the Federal Reserve Board along with NTIC Board member Bruce Gottschall, far right. Rose was quoted in Market Watch the next day.