Predatory Lending.(Brief Article)

There was a lot to talk about at the MBA National Mortgage Servicing Conference in San Antonio this year. Refinancing activity, privacy regulations, FAS 133, default management and Internet servicing were among the hot topics. But one sleeper at the show was 'predatory lending.'

That's supposed to be a loan origination issue, isn't it?

Not according to attorneys who spoke during a well attended panel session on the topic. A number of servicing practices could spell trouble for lenders, they warned. The servicing of loans deemed to have been originated on 'predatory' terms is shaping up to be a potential problem for the servicing industry. Here are some of the actions that might draw regulatory ire:

* Frequent refinancing. That's something that might draw the attention of regulators, especially if borrowers are being refinanced into loans that are not as attractive as the original and place a heavy debt burden on the borrower. Especially in the B&C lending side of the business, what looks like a debt consolidation loan to you may look predatory to regulators.

* Not reporting to credit bureaus. Again, this is primarily a subprime lending concern. If borrowers with impaired credit histories are making payments on time now, regulators expect the credit repositories to know about it. Don't skimp out on credit reporting hoping to keep ...