HUD reviews home-rehab complaint, finds city practices not predatory; council amends ordinance language

The U.S. Department of Housing and Urban Development's Columbus field office concluded the city of Lorain's home-rehabilitation loan practices did not meet HUD's definition of predatory lending and recommended the city adopt a written policy on handling protected personally identifiable information. The HUD letter, dated Dec. 5, 2024, and read into the council record by city staff, summarized its review of a complaint filed Sept. 24, 2024.

The letter—signed by Sean DeGarrett, director of HUD's Office of Community Planning and Development—found the city's loan portfolio did not include characteristics HUD associates with predatory loans (for example, deceptive terms, extraordinarily high interest rates, balloon payments, exorbitant fees, or mandatory arbitration clauses). HUD staff reviewed the city's disclosures, including Truth in Lending disclosures, and said the loans reviewed included below-market interest rates and clearly disclosed loan terms.

HUD noted the city did not have a written PII/file privacy policy but said city staff protocol to request a power of attorney before disclosing loan particulars was consistent with federal requirements (2 C.F.R. 200.303 and safeguards for personally identifiable information). HUD recommended that the city adopt a written PII/file-privacy policy; the HUD letter provided a CPD contact (Chelsea D. Jones) for follow-up.

City officials told council they had revised the ordinance language to correct a paragraph that had characterized past practices as predatory; the revised ordinance has been returned to the federal programs committee for additional review and a future meeting was being scheduled. Council accepted HUD's findings into the record and moved the ordinance back to committee rather than proceed to final adoption that night.