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Why So Few Foreclosures in Vermont?

August 18, 2009

Today’s Wall Street Journal has a very interesting article (sub. required) that makes the connection between the strong laws against predatory mortgage lending that Vermont adopted in the late 1990s and the current very low foreclosure rate in that state.

While the federal government sat on its hands in response to the surge in predatory lending between 1995 and 2000, Vermont reacted forcefully to the abuses imposed on its residents.  Among other measures, the state’s new laws  mandated that mortgage brokers had a fiduciary duty to serve the best interests of the borrowers for whom they arranged mortgages, and that lenders who offered interest rates that were substantially higher than their competitors had to inform their customers “on a colored piece of paper, chartreuse or passion pink.”

How has this worked out?  The Journal contrasts the situation in Vermont, which ranks last in the nation with only one home out of every 28,300 in some stage of the foreclosure process, with top-ranked Nevada, where one out of every 56 homes is in the foreclosure process.

(Photo: Grant MacDonald)

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One Comment
  1. August 27, 2009 5:43 pm

    Vermont is reported to have very few foreclosures as reported because you have Senator Bernie Sanders that care about the homeowners and the people of Vermont.

    Wish there were more like this well liked, respected and very dear Senator. Senator Sanders by taking swift action, continues to react forcefully to the abuses imposed on Vermont’s residents. This country is very fortunate to have a Senator like Bernie Sanders, a man whom I believe is close to everyone’s heart for his fortitude and determination to keep the American dream alive for all Americans.

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