Affordable Housing & Lending Experts
Discuss Problems Of Predatory Lending & Effects
On Most Vulnerable Borrowers
Housing Development Fund & Fairfield University’s
Center for Faith and Public Life
Co-Host Symposium to Explore Solutions to Growing Use of
Nontraditional Financing
STAMFORD,
Conn., July 9, 2007- Representatives of non-profit housing
organizations, banks, churches and local governments filled
a meeting room at the Aloysius P. Kelley, S.J. Center at
Fairfield University for a panel discussion on predatory
lending held recently. The symposium, “Predatory Lending:
Assessing the Problem and Highlighting Solutions,” was
presented by the Housing Development Fund (HDF), a unique
nonprofit bank providing funding for affordable housing and
an array of homebuyer education and assistance programs,
and Fairfield University’s Center for Faith and Public
Life. The Center is a cross-disciplinary community forum
that for the past two years has been working to raise awareness
about predatory lending and address the community’s
overall need for financial literacy.
The Center’s director Rev. Richard Ryscavage opened
the symposium by welcoming the attending speakers and guests.
The panel of affordable housing experts and lenders was moderated
by HDF President & CEO Joan Carty and included: Joshua
Silver, vice president for research and policy at the National
Community Reinvestment Coalition in Washington, D.C.; Kenneth
Willis, vice president and director for housing and community
investment at the Federal Home Loan Bank of Boston; and Melvina
Peters, homebuyer education coordinator for HDF.
“Our hope is that this symposium has helped to open the eyes
of the broad array of stakeholders who can influence vulnerable
consumers to make better choices when borrowing to purchase
a home and to understand that there are better alternatives
to refinancing if they want to be successful homeowners over
the long term,” said HDF’s Joan Carty. “We
and the Center for Faith and Public Life welcome their interest
and support as we continue to bring awareness to the issue.”
The panel discussed the increasing use of nontraditional
mortgages such as sub-prime loans, interest-only loans
and adjustable-rate mortgages -- as well as the adverse
impact they can have on communities. The speakers also
suggested possible solutions to the problem, including
supporting a bill currently in the U.S. House of Representatives
and a similar Senate bill that would protect potential
borrowers from predatory lending practices and educate
home buyers about the dangers of sub-prime loans, as well
as better alternatives.
Melvina Peters of HDF stressed the importance of pre- and
post-purchase education and counseling programs for homebuyers,
who sometimes agree to sub-prime loans because they are unaware
of the consequences, which can often lead to foreclosure
and loss of equity. HDF offers a variety of homebuyer education
and downpayment assistance programs, which have helped hundreds
of low- and moderate-income households to achieve and retain
the dream of homeownership.
According to the experts, predatory lending not only hurts
individual borrowers, but also communities at large. Nontraditional
brokers and lenders may charge interest rates and fees far
above what they need to in order to compensate for the risk
of lending to a buyer with an imperfect credit history. They
often base the loans on a property’s foreclosure value
rather than on an individual’s ability to repay. This
puts the sub-prime borrower at risk of being further in debt,
makes funds less available to more qualified buyers and decreases
the property values in neighborhoods where numerous foreclosures
take place.
Josh Silver discussed national research that points to the
east end of Bridgeport as an example of a neighborhood that
has been the focus of sub-prime lenders and predatory practices
and is suffering from the consequences.
The Housing Development Fund was founded in 1989. It has
expanded to serve all of southwestern Connecticut from its
Stamford headquarters and a Danbury office opened in 2004.
HDF’s homebuyer assistance programs include its First
Time Homebuyers Program, SmartMove low interest second mortgage
program, CHFA (Connecticut Housing Finance Authority) approved
Homebuyer Education Classes Program and Below Market Rate
Program (BMR). HDF is a HUD-certified lender and Housing
Counseling agency.
HDF provides homebuyers with homebuyer finance, counseling
and assistance programs. It also offers low-interest, flexible
financing and technical assistance to developers and municipalities,
and works with the private sector, other nonprofits, and
government entities to facilitate the development of more
affordable housing.
The organization manages public/private partnerships to lend
funds for these affordable housing initiatives. It has the
largest public/private pool of mortgage financing for affordable
housing in Connecticut – both homeownership and multi-family
development- $38 million.
The Housing Development Fund, Inc. has its headquarters at
100 Prospect Street, South Tower Plaza, Suite SP-101, Stamford,
Connecticut 06901. It also maintains an office at 8 West
Street, Suite 202-204, Danbury, Connecticut 06810. For additional
information call Tami Strauss at 203-969-1830 x19 or visit
www.hdf-ct.org.
The Center for Faith and Public Life is a cross-disciplinary
forum for students, scholars, policy makers, and religious
leaders to reflect on the many areas where religion intersects
with civic life. Anchored in the rich tradition of Catholic
Social Teaching and Jesuit spirituality, The Center views
faith as a way to link the University to local, national,
and international communities. Through academic research,
teaching, publications, and public initiatives, the Center
hopes to provide a new and exciting focus for viewing the
role of religion in the public square. For nearly two years,
the Center has been working closely with community partners
that are interested in raising awareness about predatory
lending and addressing the community's overall need for financial
literacy education.
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