Housing Bubble
AARP-Backed Predatory Lending Ordinance Passes Council Without Opposition
LOS ANGELES, /PRNewswire/ -- The landmark predatory lending ordinance backed by AARP was passed by the Los Angeles City Council yesterday, putting in to place stronger protections for Los Angeles homeowners against abusive practices.
"This victory was vital in assuring the economic and residential security critical to older residents in Los Angeles," said Maury Weiner, a member of AARP California's Executive Council. "AARP has strongly supported this ordinance, and we applaud the city for protecting the hard-earned equity of Los Angeles homeowners."
In a grassroots effort to protect Los Angeles consumers, AARP and its coalition partners visited city hall offices and let their representatives know that they needed these protections.
The city ordinance is designed to protect homeowners by requiring borrowers to receive home loan counseling by a third party entity; prohibiting lending without due regard of the borrower's ability to repay obligation and refinancing of an existing mortgage that doesn't benefit the borrower, among other protections.
Predatory lending is a collection of unfair and deceptive practices used by some lenders to pressure homeowners into signing up for high cost and often unaffordable mortgage loans. Frequently, older borrowers are ensnared in abusive loans because they are persuaded to borrow funds for home repairs, to cover health costs or to consolidate debts. More than eighty percent of Americans 50 and older are homeowners.
AARP's recent campaign effort is part of a long-term strategy to advance comprehensive protections for homeowners in California against predatory lending practices. Concerned about the repeated reports of wide-scale predatory mortgage lending abuses, AARP launched a national campaign in 2001, in partnership with California Attorney General Bill Lockyer, to fight the problem. The campaign was designed to link advocacy on behalf of older borrowers with a major consumer education initiative.
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