Delaware Mortgage Loan Brokers, Predatory Lending Considerations (5 Del. Admin. Code 2108-3.0)

Defines predatory lending practices and subjects violations to administrative enforcement by the State Bank Commissioner.

Status: Passed State: Delaware Tags: Mortgage and Lending

About the Legislation:

Predatory lending practices typically involve at least one of the following: (1) Making loans based predominantly on the foreclosure or liquidation value of a borrower's collateral rather than on the borrower's ability to repay the loan according to its terms; (2) Inducing borrower to repeatedly refinance a loan to charge high points and fees (""loan flipping""); or (3) Engaging in fraud or deception to conceal the true nature of the mortgage loan obligation or ancillary products. Loans to borrowers who do not demonstrate the capacity to repay the loan from sources other than the collateral pledged may lack sufficient consumer protection safeguards and are generally considered unsafe and unsound. Providers offering mortgage loans such as these face an elevated risk of violating Section 5 of the FTC Act or state laws prohibiting unfair or deceptive acts.

Private Right of Action: No.
Damages/Enforcement: Subject to administrative enforcement by the State Bank Commissioner.

Read the Legislation

State Association Contact

Josephine Bahn, Member

Aaron Krauss, Member

Any updates or new legislation should be sent to fraud@aba.com.

Delaware Mortgage Loan Brokers, Predatory Lending Considerations (5 Del. Admin. Code 2108-3.0)

About the Legislation:

State Association Contact

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