Predatory lending is at the forefront of the current regulatory and political agenda. Widespread media attention has prompted numerous states, regulatory agencies, and the federal government to enact or propose legislation and rules.
Though initiatives against predatory lending may initially appear to affect only originators, secondary market purchasers must be aware of the underlying issues. Regulators and consumer groups are examining the "causes" of predatory lending and have increasingly looked to the secondary market, perhaps hoping to assign responsibility for enabling predatory lending to institutions that purchase whole loans or invest in mortgage-backed securities. Secondary market purchasers may prove tempting litigation targets.