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Minnesota House of Representatives

State Representative Debra Hilstrom

379 State Office BuildingState Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-3709

For more information contact: Charlene Briner 651-296-5809

Posted: 2007-01-23 00:00:00
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Rep. Debra Hilstrom Joins Attorney General Swanson to Stop Predatory Lenders


Rep. Debra Hilstrom joined Attorney General Lori Swanson last week to unveil plans to curb predatory lending practices. The proposal comes in response to a wave of foreclosures that have affected communities across the state.
"Multiple foreclosures can be devastating to families and communities," said Hilstrom, Chair of the House Local Government and Metropolitan Affairs Committee. "This is just a common sense plan to protect them from unfair practices."
The plan would take several measures to protect consumers in the form of prohibiting or limiting prepayment penalties; improving disclosure of brokers' compensation; and improved state regulation of appraisers, closers and brokers.
A report issued by a study group Swanson convened in December cites the rate of foreclosures in Hennepin County has grown during the past two at an unprecedented rate. One of the most common practices that get homeowners in trouble is the practice of “churning," or enticing homeowner to refinance without any benefit. In several cases, people holding no or low-interest Habitat for Humanity loans have been convinced to refinance with loans that have actually cost them additional money.
"These unscrupulous lenders can devastate a families' dream of homeownership," Hilstrom said. "This plan would toughen penalties for dishonest practices that give reputable banks and mortgage companies a bad name."
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