Modeling a Response to Predatory Lending: The New Jersey Home Ownership Security Act of 2002

72 Pages Posted: 7 Jul 2004

See all articles by Baher Azmy

Baher Azmy

Seton Hall Law School

David J. Reiss

Brooklyn Law School


Professor Baher Azmy and Professor David Reiss document how predatory home lending practices have become rampant throughout the country and, notably, among low- and moderate-income and African American communities in New Jersey. Their article analyzes this emerging problem as a sometimes devastating side effect of the rapid increase in American home ownership, an otherwise almost completely desirable phenomenon. Because predatory lending has been so difficult to define, states have struggled to regulate it. New Jersey, building on the work of a few other leading states, has drafted what many consider to be the new standard for predatory lending legislation, the Home Ownership Security Act. The article places the Act in the context of governing federal law and industry practice. Such legislation is, however, quite complex and the product of significant legislative compromise, resulting in certain ambiguities that the article documents and seeks to resolve. Their article attempts to help the relatively new scholarly debate regarding predatory lending to move forward by highlighting the inherent tension between increasing consumer protections and preserving vibrant consumer credit markets. It concludes that while the Act achieves a reasonable balance between the two goals, it could have gone even farther in promoting consumer protection interests. The article will be a definitive resource for attorneys and judges as they attempt to understand and employ this complicated and important law.

Keywords: predatory lending, home ownership, mortgages, consumer protection, credit markets

JEL Classification: G21, K11, K23

Suggested Citation

Azmy, Baher and Reiss, David J., Modeling a Response to Predatory Lending: The New Jersey Home Ownership Security Act of 2002. Available at SSRN:

Baher Azmy

Seton Hall Law School ( email )

One Newark Center
Newark, NJ 07102
United States

David J. Reiss (Contact Author)

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States

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