Shady lending difficult to regulate

A North Carolina law that aims to protect borrowers from predatory lending–and which federal authorities are using as a model to help stem the nationwide subprime debacle–has had little success. The law, which has been around for eight years, seeks to ensure that borrowers will actually be able to pay back home loans by imposing financial “suitability” requirements before they take out a loan. Lenders in the state nevertheless found ways of circumventing the law, and subprime loans in North Carolina have skyrocketed over the past few years. In the first quarter of 2007, there was a 25 percent year-over-year increase in the number of foreclosure filings in the state. more [WSJ]