NCRC: Half Predatory 'Victims' Not Duped

Half the people who have asked for relief under a program to aid borrowers victimized by predatory lenders were not duped at all, according to the National Community Reinvestment Coalition."They believed they were wronged, but it was really a matter of education," said David Berenbaum of the NCRC, which operates the Consumer Rescue Fund with a $12 million commitment from Household Finance. About 500 consumers have come forward in the first year of the program, "a much larger number than we expected," he said at the Mortgage Bankers Association of America's Subprime Lending Conference in Washington. But only 250 were actually victims of abusive lending tactics, he said. The other 250 needed financial education or counseling to understand the issues. Of the group who were scammed, about 45% received mortgages through brokers who were nowhere to be found once the loans were placed with funding lenders. Moreover, nearly two-thirds of the victims had prime credit before they took out subprime loans and could have qualified for a conventional mortgage at rock-bottom rates. But in "well over" half the situations in which borrowers were wronged, those who had direct contact with lenders were able to get their loans rewritten and are now satisfied, Mr. Berenbaum said. In 10% of the instances, however, borrowers' problems could not be solved.