Reed, RI Housing Unveil "Predatory Lending" Consumer Education Campaign to Help People Spot Loan Deals That Could Cost Them Their Homes
Reed, RI Housing Unveil "Predatory Lending" Consumer Education Campaign to Help People Spot Loan Deals that could Cost Them Their Homes
Tuesday, May 31, 2005
Rhode Island led nation in sub-prime loans: National study
U.S. Senator Jack Reed joined Rhode Island Housing and a coalition of community groups at the Cranston Senior Center to unveil a consumer education campaign designed to protect homeowners from predatory lending.
Rhode Island led the nation in sub-prime lending in 2003, according to the Mortgage Bankers Association. Fourteen percent of all loans made in Rhode Island in 2003 were sub-prime, according to the most recent study by the MBA.
"Identifying and avoiding predatory lending can be a difficult task. For some Rhode Islanders, their efforts to buy a home, car or get a loan leave them with excessive interest rates and debts they can never repay," said Reed, who oversees most federal housing programs as the
Ranking Member of the Senate's Housing Subcommittee. "This is an important initiative because it can help give people the education they need to protect themselves from predatory lending or to get help if they have been victimized."
Senator Reed joined RI Housing Executive Director Richard Godfrey
to warn of the dangers of predatory lending at the Cranston Senior Center.
Funded by a $238,000 grant from the U.S. Department of Housing and Urban Development, the "Don't Borrow Trouble Rhode Island " campaign will teach homeowners how to spot predatory lending tactics and provide counseling for homeowners who might already have been victimized.
"Consumer education is a crucial component of HUD's approach to all of its programs. This effort will help Rhode Island homeowners, particularly seniors and those in our minority communities, protect their investments and avoid abusive tactics," said Nancy Smith Greer, HUD's state director for Rhode Island.
This is the second such grant Rhode Island Housing has won and is the largest grant HUD awarded in the Northeast region.
The "Don't Borrow Trouble" campaign can help protect homeowners from predatory lending.
"Buying a home is the most important financial and emotional investment most people ever make. This campaign will ensure Rhode Islanders get the education and resources they need to avoid putting their homes at risk," said Richard Godfrey, the agency's executive director. "The best advice we can give is to be wary. If a loan seems too good to be true, it probably is."
"Don't Borrow Trouble Rhode Island " targets the elderly and members of minority groups, who are the most frequent victims of predatory lending tactics.
The campaign will roll out during the time of year when predatory lending is at its peak. Financing the cost of home improvements and paying property taxes are the two most common reasons homeowners seek out loans at this time.
In addition, Rhode Island 's real estate boom makes the Ocean State an appealing target for out-of-state lenders looking to exploit cash-strapped homeowners who have built up huge equity gains over the past few years.
The ads will focus on alerting consumers to the warning signs of predatory lending activity such as pressure to sign loans before they are ready, lack of an explanation of the terms of the loan and the feeling that they have no options.
Rhode Island Housing is partnering with The Housing Network of Rhode Island, Consumer Credit Counseling Services Inc., Rhode Island Legal Services Inc., National Consumer Law Center , Fannie Mae, Freddie Mac and the state Housing Resources Commission.
The campaign includes a toll-free help line and website. For more information on "Don't Borrow Trouble Rhode Island ," call (800) 436-3180 or visit www.dontborrowtroubleri.org .
http://reed.senate.gov/housing/PredatoryLending5-31-05.htm