Six years ago, in response to numerous reports of the growth of predatory lending, the Massachusetts Community & Banking Council (MCBC) – whose Board of Directors has an equal number of bank and community representatives – commissioned a study of subprime refinance lending in the city of Boston and surrounding communities. The resulting report, Borrowing Trouble? Subprime Mortgage Lending in Greater Boston, 1999, was the first detailed look at subprime lending in the city of Boston and in twenty-seven surrounding communities.
This is the seventh report in the annual series begun by that initial study. Over the years, the scope of the report has greatly expanded. In response to the growing importance of subprime lenders in home-purchase lending, coverage has broadened to include home-purchase loans in addition to loans made to refinance existing mortgages. Also, geographic coverage has broadened to include data on subprime lending in 108 individual cities and towns as well as in all counties, metropolitan statistical areas, and regional planning areas in Massachusetts.
Responsible subprime lending can provide a useful service. Subprime lenders can do this by making credit available to borrowers otherwise unable to obtain it, while charging somewhat higher interest rates and fees that bear a reasonable relationship to the increased expenses and risks borne by the lender. There is, however, considerable evidence that much subprime lending does not satisfy this definition of responsibility.
Campen, Jim, "Borrowing Trouble VII: Higher-Cost Mortgage Lending in Boston, Greater Boston, and Massachusetts, 2005" (2007). Gastón Institute Publications. 111.