For decades, owning a home has been at the center of the American dream. For most Mainers, our homes are the most important assets we have – they represent our life’s savings, our roots in the community, and the most permanent fixture in our lives. But today, too many Mainers are finding out just how easily a home can be lost.

Here in Maine and across the country, we are facing a rising tide of predatory home lenders – and the stakes couldn’t be any higher for Maine consumers. For unsuspecting homeowners, these predatory home loans can quickly turn the American dream into a nightmare.

Predatory mortgage lenders aren’t the responsible lending institutions most Mainers are accustomed to dealing with. Instead, they are most often backed by large out-of state companies. Rather than making money on the interest of the loan, predatory lenders get their profits by quickly draining the home’s equity. They use aggressive marketing and complicated financing schemes to make big profits by escalating indebtedness, and charging hidden and exorbitant fees on mortgages.

Many consumers realize only too late that what seemed like a simple home loan or refinancing could cost them tens of thousands of dollars in hidden fees, and result in ballooning mortgage payments, escalating debt, and all too often the devastating loss of a family home.

For these Maine families, there is little recourse. These mortgage contracts often require you to sign away your right to go to court if you are mistreated. They can include stiff financial penalties aimed at preventing you from refinancing, in the hopes of trapping you in a bad loan. And predatory lenders can use growing fees and skyrocketing rates to quickly escalate a home foreclosure.

Today, most of these predatory practices are legal in Maine. While Maine has long been a national leader in consumer protection, our current laws leave homeowners woefully vulnerable to predatory lenders.

Maine homeowners aren’t the only casualties. Conscientious lenders and small businesses – like local banks, credit unions, and responsible mortgage brokers – are also victims of the boom in predatory lending. Local lenders play an important role in our economy and make crucial investments that help our families and communities grow.

But they are seeing their customers lured away by predatory lenders with deceptive advertising and false promises.

Across the country, states are working to strengthen and update their laws to better protect citizens. This year, Maine has a unique opportunity to protect homeowners and to close the door on predatory home lending.

As Speaker of the Maine House, I am joining with local banks, credit unions and responsible mortgage brokers who want to defend their customers, in an effort to change Maine laws and to close the loopholes that allow predatory lending.

I am sponsoring a comprehensive new law called the “Maine Homeowner Protection Act.” This bill would outlaw the predatory lending practices that are draining millions of dollars from Maine families each year, and restore Maine as a national leader in consumer protection.

The new legislation will prevent the practice of using excessive fees to drain equity from a home and would eliminate so-called “binding arbitration” clauses in mortgage contracts that deny consumers a right to go to court. It would restrict prepayment penalties, which cost consumers thousands of dollars for refinancing or paying their loans off early.

The bill would also outlaw a predatory practice known as “flipping,” when lenders convince borrowers to refinance unnecessarily in order to generate thousands of dollars in fees. And it proposes to reduce the amount of fees a homeowner can legally be charged.

All of this will help to level the playing field for local, responsible mortgage lenders.

Predatory lending threatens our economy, and our way of life in Maine. When a family loses their home to a predatory lender, we have lost and important part of our community. And I believe that as lawmakers, we must also acknowledge that we have failed in our responsibility to protect those citizens.

I encourage Maine people to contact their local lawmakers and ask them to strengthen the laws that protect homeownership.

Few things are as important as safeguarding the financial security of Maine families. It is my hope that lawmakers from all parties will step forward this session to ensure Mainers in their communities will not be the next victims.

In the meantime, the simplest way for you to protect yourself from predatory lenders is to add your household to the “Do-Not-Call-List,” and to work directly with a local bank, credit union, or broker who you know and who has roots in your community.

Rep. Glenn Cummings, D-Portland, is the Speaker of the Maine House of Representatives and the prime sponsor of the Maine Homeowner Protection Act.

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