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February 04, 2004

Ending Exploitive Mortgages

One nasty trend in the law are contracts that force you to give up your right to sue, even if the other party breaks the law-- so called arbitration clauses used largely by big business to undermine consumer rights.

Fannie Mae, the home loan financial giant, under pressure due to its own financial scandals, has done the right thing and decided to stop buying loans from companies that require borrowers to give up their rights as a condition of the mortgage.

Fannie Mae's move on mandatory arbitration clauses, first reported in Wednesday's Washington Post, was part of initiatives by the company to increase homeownership and the stock of affordable rental housing. The company announced new programs Wednesday with the AARP and consumer groups.
Nothing like ratcheting up pressure by grassroots groups to force these kinds of concessions.

Posted by Nathan at February 4, 2004 06:14 PM