158 TRANSNATIONAL LAW & CONTEMPORARY PROBLEMS [Vol. 20:157
Predatory lending cost Carla Hoffler an d her family their home. 1 Carla is
a middle-aged African American woman who resides in Connecticut with her
husband and three sons.2 Before falling victim to predatory len ding, Carla
and her husband had stable jobs, earn ing a combined income of over $100,00 0
per year.3 However, a chain of events that began with a mortgage refinance
marked by undisclosed fees and an excessive interest rate ballooned into a
financial crisis for the Hoffler family. In 2005, Carla’s husband was injured
on the job and could no longer work.4 He received a mere fraction of his
salary in worker’s compensation. 5 Carla became the sole wage earner for her
family.6 At that time, the Ho ffler family had a $900 per month mortgage. 7
These payments were easy to manage until the Hofflers lost more than half of
their combined income due to Mr. Hoffler’s injuries.8 Carla found herself
struggling to make the mortgage paym ents in addition to their car payments,
cell phone bills, and credit card bills. She decide d that refinancing their
home9 was the only option to keep from drowning in debt.
The refinance took place over a three- to four-week period, during which
Carla and her husband met with representatives from the mortgage
company.10 During these meetings, the representatives never disclosed the
high fees and costs accompanying the refinance, and did not even disclose the
* This author would like to thank Professor Robin Effron of Brooklyn Law School for her time
and effort in making this Note publishable. Thank you also to James E. Hartley, Jr., Attorney
with Verus Financial, LLC, Ernesta Visentini, Attorney with Studio Visentini Marchetti e
Associati in Italy, and Anthony Wong, 2010 Managing Editor of the Brooklyn Journal of
International Law, for their input and support throughout the writing process. Finally, thank
you to the editorial board of The University of Iowa journal of Transnational Law and
Contemporary Problems for publishing this Note. This author is a member of the class of 2011 at
Brooklyn Law School and an Executive Notes & Comments Editor of the Brooklyn Journal of
1 Telephone Interview with Carla Hoffler, Connecticut Resident and victim of predatory lending
(Nov. 9, 2009).
6 Hoffler, supra note 1.
9 A refinance often “triggers a round of points and fees that are added to the principal,” which
results in “an ever-increasing principal and a severe reduction in the equity in that home.”
ELIZABETH RENUART, STOP PREDATORY LENDING: A GUIDE FOR LEGAL ADVOCATES 16
(2002). The borrower is responsible for paying off fees on the old mortgage in addition to the new
points and fees from the refinance, which accumulate interest throughout the life of the loan. As
indebtedness increases, the equity in the home decreases. Id.
10 Hoffler, supra note 1.