Today, the Seattle Times has an article "Homeowners in debt, seniors prime targets of riskiest loans" by Susan Kelleher and Justin Mayo.  It is a follow-on to yesterday's story "The Fleecing of Frances Taylor."   "Taylor refinanced her home three times in just three years. Those loans stripped away more than $50,000 of her home equity in fees alone and eventually obligated her to mortgage payments that were nearly three times her monthly Social Security check of $761."

Today's story is about predatory lending.  "Targeting homeowners for mortgages based solely on the financial stake they have in their homes is universally regarded as predatory lending and is illegal under state and federal laws. But experts say that hasn't stopped lenders from doing just that."

More than one in three borrowers in King County who got loans from the same lender that foreclosed on Taylor were 50 or older, and one in seven was 60 or older, according to a Seattle Times analysis of more than 4,000 loans by Ameriquest Mortgage. Not only that, nearly all of those borrowers already owned their houses.

As lawmakers consider remedies to ease the damage from risky home loans, mortgage-industry representatives are urging them to temper any increased regulation. After all, they say, such loans have given millions with poor credit an opportunity to buy into the American dream of homeownership.

But subprime lenders have done more than market to homebuyers; they have targeted homeowners. Some loans were more predatory than subprime, with features so onerous that borrowers refinanced their way out of the American dream, losing their houses - and substantial equity - to mortgages they never stood a chance of repaying.

They talk about how seniors are being targeted, and conducted an investigation of Ameriquest Mortgage.

The following are links the article provided:

Guard against predatory lending

A state task force considering potential changes in regulations for the mortgage industry is expected to release its recommendations by year's end. You can e-mail comments to the task force at taskforce@dfi.wa.gov or submit a comment at www.dfi.wa.gov/taskforce/default.htm

To learn more about what constitutes predatory lending and how to protect against it:

U.S. Department of Housing and Urban Development: www.hud.gov/offices/hsg/sfh/buying/loanfraud.cfm

Washington State Department of Financial Institutions: www.dfi.wa.gov/consumers/predlendwp.htm

Center for Responsible Lending: www.responsiblelending.org/issues/mortgage/sevensigns.html

Freddie Mac: www.dontborrowtrouble.com/en/pre_pay.html

To verify that those selling mortgages are licensed to do so in Washington, go to: https://fortress.wa.gov/dfi/licenselu/dfi/licenseLU/default.aspx

To report mortgage fraud:

In Washington: www.mortgagenewsdaily.com/mortgage_fraud/report_Washington.asp

Nationally: http://seattletimes.nwsource.com/html/localnews/www.mortgagenewsdaily.com/Mortgage_Fraud/National_Resources.asp

Source: Seattle Times research

This post is not an attack on lenders, because this is a follow-on to the story I wrote yesterday, I felt I needed to add this one.

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