Friday, January 04, 2008

predatory mortgages

Parker v. Long Beach Mortgage Company - ED Pa. - January 3, 2008

Although the court rejected the consumer claims of the plaintiffs, "relatively sophisticated borrowers" one of whom had a real estate license, there is some potentially useful language in the opinion.

The court noted that the dispute involved a "broker and four lending institutions [and] embodies many of the factors identified with predatory, subprime mortgage loans:[ n.1] an aggressive mortgage broker, no document loans, interest climbing to double-digit rates, escalating payments, balloon payments, prepayment penalties, and negative amortization. As distasteful as the practices may be, [n. 2] that odor of opportunism is not enough to save [the plaintiffs] from themselves."

n.1 - HUD-Treasury Joint Report

n. 2 - The power to curb predatory practices lies either in consumer education or with Congress; as a court of limited jurisdiction, I may only enforce the laws as written, not as I would wish they were written.