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Center for Responsible Lending to Congress: “Act Quickly”



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By : Leticia Carvalho    99 or more times read
With the nation on the brink of an economic recession, the Congress finally approved the bailout legislation, which has a budget of $700 billion. A huge percentage of the budget will be used to buy bad assets, mostly tied to mortgages, from distressed financial investment giants. But for the Center for Responsible Lending, it is still crucial that the Congress continue its efforts and this time, address the problem of troubled homeowners.

For the CRL, the widespread financial crisis can actually be traced to massive foreclosures. In the last two years, over 2 million homes have already entered some stage of foreclosure and another million is expected by the end of the year. The CRL is even estimating about 6.5 million foreclosures in the next years. This is expected to result to a loss in terms of property value amounting to about $352 billion.

Millions of homeowners are finding themselves with an “upside mortgage”, making it difficult for them to refinance or sell their homes at the price they want. In the end, most of them lose their homes to foreclosure.

With the skyrocketing foreclosure rate, declining home prices and tightening lending guidelines, it is not surprising that the country is in the throes of a financial meltdown. For CRL, the only way to minimize the damages is for Congress to provide a long-term solution for these distressed homeowners. If not, all the efforts of the government to save the nation from a recession will be futile.

The Center for Responsible Lending is a nonprofit organization dedicated to protect family wealth and homeownership by making sure that all abusive and aggressive financial practices are eliminated. One of the reasons for the collapse in the mortgage industry is the predatory lending practices during the last housing boom. Many borrowers were able to take out loans which they could not afford in the first place.
Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.

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