WASHINGTON - The Treasury and Housing and Urban Development departments on Tuesday urged lawmakers to pass legislation that would prohibit loan flipping and other predatory lending practices.

At a news conference Treasury Secretary Lawrence H. Summers and HUD Secretary Andrew Cuomo recommended a combination of legislative and regulatory actions to protect borrowers from unscrupulous lenders. The proposals were part of a 115-page joint report written by the two agencies after convening a task force in late March to investigate increasing reports of such activities.

Most predatory lending occurs in the subprime mortgage market, which rose to $160 billion in 1999, from $35 billion in 1994, the report said. Officials said their proposals would curb predatory lending without stamping out ethical lines of business.

"It is right and proper that our financial system develop new and improved techniques to provide more and more Americans with access to capital," Mr. Summers said, but "it is wrong when that lending is abusive, when that lending preys on those who do not understand sophisticated finance."

Under the proposals, lenders would have to disclose credit scores and could be held liable for misconduct by mortgage brokers. The types of loans covered by existing laws on predatory lending would be broadened; refinancings would be barred within 18 months of origination unless borrowers benefit; prepayment penalties would be restricted; and balloon payments would be restricted to at least 15 years.

The report also encourages regulators to deny Community Reinvestment Act credit for making or buying loans with predatory terms.

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