Nonconventional mortgage lenders at an annual conference last week focused on building their lobbying war chest and polishing their industry's image.

The National Home Equity Mortgage Association, which raised more than $100,000 for its political action committee at the conference, will be increasing its lobbying efforts, executives said.

In addition, they vowed to continue working with other trade organizations to stamp out abusive practices that have put the entire industry in a bad light.

Allegedly predatory practices by some of the companies that make loans to borrowers who do not qualify for bank loans have been the subject of damaging press reports and a congressional hearing in recent months.

A committee of executives from several trade groups has complied a list of questionable practices, dubbed the "bankers dirty dozen," and is attempting to foster agreement within the industry on what the lending standards should be, said Jeffrey Zeltzer, executive director of the home equity association.

Flipping and churning-the practice of aggressively refinancing borrowers into larger loans-and questionable foreclosure methods top the list of abuses, Mr. Zeltzer said.

The committee, the Mortgage Reform Working Group, is made up of executives from the Mortgage Bankers Association, National Association of Mortgage Brokers, bank and realtor trade groups, and consumer advocates, he said.

Lenders are proposing that borrowers in default should be allowed to offer their homes for sale for 60 to 90 days, and retain the cash from the sale, Mr. Zeltzer said.

In addition, the trade association is "going to the mat with the National Association of Mortgage Brokers" over the issue of full disclosure, said Joe Lefkoff, an attorney who was among the speakers at the conference. The organization would prefer that brokers' compensation be fully detailed on loan documents.

A string of class actions have been filed in the past two years, alleging that yield spread premiums, or additional fees lenders pay brokers for higher rate loans, are illegal.

Mr. Lefkoff encouraged lenders to leave the phrase "yield spread premiums" off loan documents entirely. "You're giving plaintiff's lawyers half their case," Mr. Lefkoff said.

Texas lenders, who were unable to make home equity loans there until legislation passed this year, are already facing lawsuits, he said. There is a provision in the recent amendment that if any part of the act is preempted by legislation, the whole act is annulled, which gives the suits there extra weight, Mr. Lefkoff said.

This year the association was expected to name Laura Borrelli president for a second term, to maintain continuity within the working group. It would be the first time anyone has served consecutive terms.

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