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While the testimony that the National Association of Realtors addressed a Senate committee on banking how it opposes predatory lending, it does seem a bit disingenuous. There is a big difference now that the national consensus has turned against predatory lending instead of being in front of the issue while it was providing a boon to the organizations membership.

When housing prices were going up and interest rates were low, that was the time to warn consumers, and Congressman, about the risks of predatory lending with subprime loans. Not after the market had turned. There are some subdivisions in Southwest Atlanta that a friend of mine was a builder in that were built for the subprime market. As my friend said, if you had a pulse, you could buy a home there.

Now as the adjustable rates are resetting and the market has turned, these same subdivisions are turning over with panic selling and foreclosures. In reality, many of the people living there should not have bought. However, the dream of a new home and a mortgage that was less than renting was too big of a tease.

So the builders, Realtors, and lenders all sold these people down the river.

Now for the caveat. Most agents are not in the business of hurting buyers. But for the National Association of Realtors to come out after the party and tell everyone that we do not condone bad behavior when they watched it happen the night before not saying a word is disingenuous to me.

In testimony on “Preserving the American Dream: Predatory Lending
Practices and Home Foreclosures” presented to the U.S. Senate Committee on Banking, Housing and Urban Affairs, NAR said that abusive and predatory lending practices are putting our nation’s communities at risk. These practices can cause more families to lose their homes and savings through higher foreclosure rates. The vacancies that result can deflate the value of surrounding homes, as well.

“Predatory lending can be disastrous not only for the borrower and his
or her family, but also for the entire community,” said NAR President Pat Vredevoogd Combs, of Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt. “High foreclosures of single-family homes are a serious threat to neighborhood stability and community well-being. Realtors(r) help families achieve the dream of homeownership, and NAR supports responsible lending with increased consumer protections to ensure that the ‘dream’ our members help fulfill does not turn into a family’s worst nightmare.”

“Real estate professionals have a strong stake in preventing predatory
lending,” said Combs. “We have to make sure that while addressing predatory lending, the legislative and regulatory responses to lending abuses do not go too far and inadvertently limit the availability of reasonable credit for prime as well as subprime borrowers.” via the NAR

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