Federal agency cracks down on a predatory lending practice that often hurts Somali Muslims

Associated Press

The Consumer Financial Protection Bureau is pledging to scrutinize contract for deed lending, a form of alternative or seller financing in which a private seller or investor group comes to a loan agreement with a buyer without many of the typical banking and mortgage regulations and protections. The federal watchdog agency declared earlier this month that they must now play by the rules – effectively putting private sellers on notice that they too are subject to the Truth in Lending Act as banks, lenders and brokers are. The CFPB recently highlighted how predatory lending has especially affected the Somali Muslim community, describing how families’ housing situations could be derailed by hidden balloon payments and uninhabitable properties.