Released: April 04, 2007

Predatory lenders targeted moderate-income homeowners

Source: Dina ElBoghdady, Washington Post (Free Registration)

One in 30 homeowners in Philadelphia has been hurt by predatory lenders who target people who live in moderate-income neighborhoods and whose homes are often their only asset, illustrating a problem that’s captured the attention of federal and local legislators throughout the country.

The study by the Reinvestment Fund, a community-development group in Philadelphia, analyzed the sales and mortgage histories of 15,500 Philadelphia properties to discern patterns of predatory lending practices, which generally impose excessive or unnecessary rates and fees, often on unwitting borrowers, many of them minorities. The study is to be released today.

“The same kind of lending practices have taken place in many different parts of the country,” said Mark Zandi, chief economist at Moody’s Economy.com, who has reviewed the Philadelphia study.

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