Senator Eliot Shapleigh - El Paso, Texas

One in 30 homeowners in Philadelphia has been hurt by predatory lenders who target people who live in moderate-income neighborhoods and whose homes are often their only asset, illustrating a problem that's captured the attention of federal and local legislators throughout the country.

The study by the Reinvestment Fund, a community-development group in Philadelphia, analyzed the sales and mortgage histories of 15,500 Philadelphia properties to discern patterns of predatory lending practices, which generally impose excessive or unnecessary rates and fees, often on unwitting borrowers, many of them minorities. The study is to be released today.

"The same kind of lending practices have taken place in many different parts of the country," said Mark Zandi, chief economist at Moody's Economy.com, who has reviewed the Philadelphia study.

The fund found that the likelihood of becoming victimized by predatory lenders is one in seven for borrowers who have refinanced their homes multiple times. Any mortgage creates a public paper trail that documents a borrower's financial situation.

"That public record becomes a mark that you are available and you have equity available and you can be marketed to," said Ira Goldstein, author of the 100-page study, which was funded by the Ford Foundation.

The group timed the study to coincide with debate on how to stem the national surge in mortgage delinquencies and foreclosures, both of which have risen to record levels in some parts of the country.

Lax lending in the first half of the decade allowed people to buy homes they otherwise could not afford. But when the housing market softened, people who had trouble making their monthly payments got stuck with houses they could not sell or refinance. The most vulnerable of homeowners were people with blemished credit or low incomes, known as subprime borrowers.

Generally, those people pay 2 to 3 percent more on a mortgage than the more-creditworthy prime borrowers. Predatory lenders add to those already high costs by raising the rates even further and tacking on fees. A predatory loan may have high prepayment penalties, for instance, that strip the equity from a home.

With the mortgage crisis unfolding, lawmakers on Capitol Hill have vowed to act. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, has held hearings on the scope of the problem and recently sent a letter to House Democrats detailing his plans to offer legislation that aims to curb predatory lending.

"A number of states have passed strong anti-predatory lending legislation over the last few years, and this has helped reduce abuses that put homeowners at risk," Frank wrote. "However, a number of states do not have such laws, and some parts of the state laws have been preempted by Federal regulators."

Sen. Charles E. Schumer (D-N.Y.) said this week that he plans to introduce legislation to regulate mortgage brokers because "subprime lending has become an unregulated mess."

At the local level, D.C. council member Mary M. Cheh (D-Ward 3) offered legislation yesterday that would require lenders to disclose monthly payment information to borrowers in an easily comprehendible fashion printed in large type on red paper.

A recent study by the Urban Institute, citing federal data, found that 17.6 percent of all conventional home-purchase and refinance loans in the Washington area were made by subprime lenders in 2005 -- a new high for the region. A separate study by the Center for Responsible Lending found that predatory loans stripped District families of $24.9 million in home equity in 2001.

The Philadelphia study concludes that predatory lenders are not targeting the poorest neighborhoods. Rather, they're seeking moderate-income neighborhoods where they can squeeze the equity of a house. The higher the interest rate on a mortgage, the more commission a loan provider typically makes.

"A lot of these guys are not going to the bottom of the market," said Goldstein, the study's author. "They're trolling up a little bit because there's more money to be had there."