A number of states have anti-predatory lending laws, but many states found that during the housing boom, predatory lenders found ways to sidestep existing laws with new mortgage instruments. Hence, several states already have amended existing lending laws or enacted new statutes that address directly problems that contributed to the housing bust.

Loan refinance programs offered in Illinois, Maryland, Massachusetts, New York, and Ohio require participants to undergo homeownership counseling as part of their refinance agreement.

Foreclosure legislation from states such as Maine, Maryland, Minnesota, New York, and Rhode Island also includes financial education components for troubled borrowers.

According to the Jump$tart Coalition for Personal Financial Literacy, at least 17 states require financial education to be incorporated into public school curricula. Three states, Missouri, Tennessee, and Utah require a separate course committed to personal finance.

Several states use Freddie Mac's Don't Borrow Trouble campaign to educate borrowers about the dangers of predatory lending. Don't Borrow Trouble combines consumer outreach with education and counseling to give people the tools they need to avoid being deceived by a predatory lender. Alaska, Connecticut, Delaware, Kentucky, Minnesota, Mississippi, New Mexico, North Carolina, and Rhode Island already statewide campaigns, as do communities within 20 other states.

California
California requires all participants in the state's Community Stabilization Home Loan Program to receive homebuyer education from approved homeownership counselors.

Colorado
Colorado plans to add a core curriculum that includes financial literacy, defined as financial responsibility and planning skills, money management skills, and decisionmaking skills. The core curriculum must be adopted by school districts and accredited nonpublic schools for grades 9 through 12 by 2010-2011 and for grades kindergarten through 8 by 2014-2015.

Governor Bill Ritter has signed a bill expanding the foreclosure assistance available to borrowers, such as access to free credit reports. The legislation also applies protections currently offered in the state's Consumer Credit Code to consumer leases (including refinancing), and updates certain other provisions.

Illinois
S.B. 2387, signed in August 2008, adds homeownership to the financial literacy component of the consumer education instruction required for public high school students. Homeownership education includes the basic process of obtaining a mortgage and covers the concepts of fixed and adjustable interest rates, subprime versus prime loans, and predatory lending.

Illinois
Illinois requires homeownership counseling for all potential first-time homeowners seeking to purchase a property in Cook County (which includes Chicago) with a nontraditional mortgage loan.

Iowa
Governor Chet Culver signed H.F. 2555 in April 2008 to inform the public about investing in securities and spotting securities fraud.

Kansas
Governor Kathleen Sebelius signed H.B. 2746 in May 2008, to increase penalties on mortgage brokers that engage in fraudulent activities, stabilize the real estate recovery fund, and authorize monies in the fund to go toward grants to high schools and universities for teaching courses on money management and homeownership.

Montana
The Montana Board of Housing (MBOH) promotes homebuyer education and individual homeownership planning across the state by providing funding to the 24 partners of the Montana HomeOwnership Network.

Michigan
The Michigan Office of Financial and Insurance Services has established a consumer education outreach program to provide consumer and community groups with resources on financial services, scams, and investments.

Ohio
Ohio's Save the Dream Web site features resources specially designed for families recovering from foreclosure. The "families" page features links to state social services, financial education services, safe and affordable housing, and other relevant assistance.

Puerto Rico
Puerto Rico has initiated four new programs and will extend two other successful initiatives as part of a comprehensive effort to strengthen Puerto Rico’s housing market. This includes a housing stimulus program from September 1, 2010 – June 30, 2010 which would include:

• Zero property tax payments for five years for all new residential purchases;
• Zero capital gains tax on the sale of residential and commercial properties;
• Reduced payments for tax stamps and vouchers;
• Reduced capital gain tax for buyers and increase deduction for capital losses.

In addition, the initiative includes the: my mortgage insurance program, which would provide for financing of 105% of the purchase price and no out of pocket expenses to the buyer; the my new home program, which provides $50 million in subsidies for low income housing purchases; and the rental stimulus program which exempts landlords from paying taxes on rental income beginning on January 1, 2011. Existing programs such as the closing costs program which would provide up to $10,00 or 5% of construction costs, and the second mortgage program, which provides interest free second loans for 10 years will also be extended through December, 2010.

Utah
Utah has established a financial and economic literacy "passport" to track student learning of financial concepts such as income, saving and investing, money management, consumer protection, spending and credit, and risk management.

Virginia
Governor Tim Kaine signed HB 2513 in February 2007 to allow life skills programs at public colleges and universities to educate students about savings and investments, predatory lending practices and interest rates, consumer fraud, and identity theft and protection.

Washington
Governor Chris Gregoire signed S.B. 6272 in February 2008 to provide information to Washingtonians about laws regulating financial institutions and to help members of the public obtain information about financial products. Moreover, the legislation appropriates funds for homeownership pre-purchase outreach and education and post-purchase counseling and support.

Washington
provides an online list of post-purchase housing counselors who are providing free services to homeowners.

Sources:

• Emerging Trends: State Actions to Tackle the Foreclosure Crisis
• Issue Brief: State Strategies to Address Foreclosures
• National Conference of State Legislations
• Jump$tart Coalition
• Conference of State Bank Supervisors