cover image: Consumer support and protection in mortgage and home equity based borrowing

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Consumer support and protection in mortgage and home equity based borrowing

12 Nov 2003

The report assesses whether the surge in predatory lending practices in the U. S. is an indicator of what is to come in Canada or a uniquely U. S. phenomenon - occurring because of the particular institutional, regulatory social and market framework in the U. S. First, the U. S. experience was reviewed, including the legislation and political responses. [...] More streamlined legislation and enforcement: Canada does not have the proliferation of acts and regulatory bodies at the federal level which exist in the U. S. Protection for borrowers in Canada primarily resides in the acts governing the financial institutions and the accompanying “cost of borrowing” regulations. [...] The Canadian subprime market will be attractive for U. S. lenders seeking expansion given the maturity of this market in the U. S. This increases the risk of experiencing the problems experienced in the U. S. • Less powerful lobby/advocacy groups than in the U. S. to ring the alarm bell: in the U. S. powerful lobby/advocacy groups conducted a campaign to combat predatory lending. [...] Canada does not have the high incidence of economically depressed ethnic ghettos excluded from mainstream borrowing that were the feeding ground for predatory lenders in the U. S. • The backlash against predatory lending in the U. S. may have a sobering influence in Canada: the backlash in the U. S. and the legislative response may serve as a warning to subprime lenders in Canada. [...] It is important to assess whether the apparent surge in predatory lending practices in the U. S. is an indicator of what is to come in Canada or whether it is a uniquely U. S. phenomenon - occurring because of the particular institutional, regulatory social and market framework in the U. S. To explore the potential vulnerability of Canadian borrowers, we need to examine what is happening in the U.
government politics economy insurance credit finance banking debt financial services government policy interest loans mortgage loans mortgages loan mortgage demand for money lending crime, law and justice economy, business and finance credit (finance) fees lenders annual percentage rate predatory lending home equity loans

Authors

Wellman, Tony

Pages
102
Published in
Canada

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