Activists Want New Lending Laws

TALLAHASSEE - Activists from across the state called on lawmakers Tuesday to enact anti-predatory lending laws to prevent Floridians from getting into tricky mortgage situations that result in foreclosure.

Pitching tents at the Capitol, they wanted to represent how many Floridians have become homeless as a result of the state's roller-coaster housing market and, they said, unscrupulous lenders who handed out loans to unqualified buyers.

"The critical thing the Legislature can do is ban predatory practices that can lead to foreclosures," said Brian Kettenring, head organizer for ACORN, the Association of Community Organizations for Reform Now.

Almost 280,000 Floridians are facing foreclosure, the group says. This month, Florida's foreclosure rate was the third-highest in the nation, according to California-based research company RealtyTrac.

For that reason, Sen. Ted Deutch, D-Boca Raton, and Rep. Scott Randolph, D-Orlando, are sponsoring bills that would require lenders to make sure borrowers are actually capable of paying loans back. Too many borrowers, activists say, were sucked into mortgages they could not afford. The bills would also prohibit banks from issuing prepayment penalties and would limit balloon payments, among other measures.

"Banks have foreclosed on 35,000 to 40,000 pieces of property from the beginning of 2007 until now," Randolph said. "We're trying to look at it perspectively to see what can the state do to make sure it doesn't happen again."

The proposals, however, will likely face a lot of opposition from the banking and mortgage industries. The bills also have yet to receive a hearing date in either a House or Senate committee.

"It sounds good. It makes people feel good," said Tom Cardwell, lobbyist for the Florida Banking Association. "But it doesn't address the current foreclosure issue and in the long run can do more harm than good."

To Cardwell, the proposals punish established banks, not the fly-by-night mortgage originators who many point to as giving loans to people who could not afford them.

"A better approach to all of this is to try to regulate the people who were there at the scene of the fire," he said.

Kettenring, of ACORN, said he has heard this argument before.

"When you have finger-pointing, it's really a distraction from the real issue - that predatory lending is costing peoples' homes," he said.

Travis Munnerlynn, 60, traveled from Orlando on Tuesday to give his support to the bill. He and his wife, Patricia, almost lost their house last year when they fell behind on payments after refinancing their home. Munnerlynn, a security guard, said he did not fully understand the terms of his adjustable-rate mortgage and did not know that his payments would jump so much.

"When they tell you a story, it's like honey dripping out of their mouths," he said.

When his wife lost her job as a church secretary, money became tight. At the same time, their mortgage payments ballooned from $640 a month to $950 a month and then $100 more per month when their interest rate changed.

Until Munnerlynn's story was picked up by the media, their bank refused to talk to them. Now, they have modified their loan, and their house was saved, Munnerlynn said.

"If they pass that bill, it's going to help people in the future from being done like we were," he said.