Unfortunately, our belief in the importance of equal opportunity and nondiscrimination is too often forgotten when it comes to the debate over whether and how to police the market for home mortgages. In poor and working-class communities across the nation, predatory mortgage lending has become a new scourge. Predatory lending is the practice of imposing inflated interest rates, fees, charges, and other onerous terms on home mortgage loans--not because the imperatives of the market require them, but because the lender has found a way to get away with them. These loans (which are often sold as refinance or home improvement mechanisms) are foisted on borrowers who have no realistic ability to repay them and who face the loss of their hard-won home equity when the all-but-inevitable default and foreclosure occurs. ...[snip]  

In these circumstances, government must step in to curb predatory lending and encourage the flow of fairly priced capital to sectors where it is needed and will be well-used. Filling a gap left by federal inaction, state enforcement efforts in this arena have centered on identifying the valid economic criteria considered in mortgage underwriting and compelling lenders to focus on those factors--not on preconceptions, prejudices, or predatory instincts--in determining how to price home mortgage loans. The point is not to protect people from their own bad decisions or, conversely, to guarantee that mortgages be granted to specific persons or groups on specific terms--that would violate the principle of market freedom. The point is to support equal opportunity and to ensure that borrowers are charged rates and fees based upon their status and qualifications as economic actors in the mortgage market, not upon their diminished access or market savvy or their race.