A coalition of 29 private and ;public organizations including Freddie Mac, Kentucky Housing ;Corporation, the Attorney General's Office and the State Treasurer's Office ;today launched a major public education campaign aimed at preventing predatory ;lending throughout Kentucky. The organizations have established a toll-free ;consumer help line that will be staffed by trained professionals who can offer ;free information and referrals to individuals seeking information about ;purchasing a home, refinancing, consolidating debt, taking out a home-equity ;loan, and mortgage foreclosure prevention. Individuals can be referred to ;appropriate legal or financial experts. The Kentucky Don't Borrow Trouble(SM) campaign utilizes brochures, the ;http://www.dontborrowtrouble.com Web site, billboards, and radio public ;service announcements to educate consumers who are most vulnerable to ;predatory lending -- the elderly, minorities and low- to moderate-income ;individuals. By combining advertising and face-to-face consumer education and ;housing counseling, the campaign helps consumers avoid abusive lending ;practices, such as exorbitant interest rates, excessive fees and pressuring ;tactics. The campaign encourages consumers to call the Don't Borrow Trouble help ;line at (866) 830-7868, after November 1. It is hoped that individuals will ;use these resources for advice before they get into financial difficulty when ;purchasing a home, refinancing, consolidating debt, or taking out a home ;equity loan. The help line is also a resource for those who find themselves ;currently in trouble with foreclosure. "When I think about the impact predatory lending has on Kentuckians, I ;recall the impact it nearly had on a member of my own family," said Ben Cook, ;chief executive officer of Kentucky Housing Corporation and chair of ;Kentucky's Don't Borrow Trouble task force. "Many people do not understand the ;lending process and can be easily intimidated. Kentucky Housing Corporation ;is proud to play a lead role in Don't Borrow Trouble, which helps arm ;consumers with accurate information so they don't become victims of predatory ;lending." "Predatory lending practices attack the heart of our communities. These ;practices can strip away home equity and trap unwary borrowers in a dismal ;cycle that ultimately replaces homeownership with foreclosure," said Craig ;Nickerson, vice president of Expanding Markets for Freddie Mac. "Don't Borrow ;Trouble is a proven method to help stop predatory lending and to keep families ;in their homes, build wealth and strengthen communities. These organizations ;should be commended for banding together and combining their resources to ;educate consumers on the perils of predatory lending practices." "This campaign has the very laudable goal of protecting Kentucky taxpayers ;from predatory lending practices," said Kentucky State Treasurer Jonathan ;Miller. "I am proud to be a member of the Don't Borrow Trouble coalition." "For most of our citizens, the home is their most valuable possession," ;said Kentucky Attorney General Greg Stumbo. "Unscrupulous lenders and home ;improvement contractors prey upon our vulnerable citizens, particularly the ;elderly, by engaging them in a cycle of high cost loans that cannot be repaid ;and often result in foreclosure. Consumer education efforts like these are ;critical to warning our citizens and stopping predatory lending practices." Additional organizations participating in this campaign include: American ;Association of Retired Persons, Administrative Office of the Courts, Americana ;Community Center, Better Business Bureau (Lincoln Trail Area Branch), Chase, ;Sanders & Associates, Semonin REALTORS, Citizens Union Bank, Federal Reserve ;Bank of St. Louis, General Motors Acceptance Corp., The Housing Partnership, ;Inc.; U.S. Department of Housing and Urban Development - Louisville, Kentucky ;Division of Aging Services, Kentucky Commission on Human Rights, Kentucky ;League of Cities, Kentucky Real Estate Commission, Lexington Fair Housing ;Council, Lexington-Fayette County Urban League, Lexington-Fayette Urban County ;Human Rights Commission, Louisville Metro Department of Housing & Community ;Development, Louisville Urban League, Mountain Association for Community ;Economic Development, Office of Financial Institutions - Kentucky, Office of ;Kentucky Legal Services Program, Residential Mortgage Services and Seven ;Counties Services, Inc. Predatory lending practices strip equity away from homeowners. A few ;examples are repeatedly refinancing a loan within a short period of time and ;charging high points and fees with each refinance; packing a loan with single ;premium credit insurance products like credit life insurance, and not ;adequately disclosing the inclusion, cost or any additional fees associated ;with the insurance; or charging excessive rates and fees to a borrower who ;qualifies for lower rates and fees. Pioneered in Boston by Mayor Thomas M. Menino and the Massachusetts ;Community and Banking Council, Freddie Mac is the principal sponsor of Don't ;Borrow Trouble's expansion throughout the United States. Freddie Mac has ;brought the campaign to 40 locations across the country, and has received more ;than 100,000 inquiries to the Campaign's help line. ; Freddie Mac is a stockholder-owned company established by Congress in 1970 ;to support homeownership and rental housing. Freddie Mac fulfills its mission ;by purchasing residential mortgages and mortgage-related securities, which it ;finances primarily by issuing mortgage-related securities and debt instruments ;in the capital markets. Over the years, Freddie Mac has made home possible for ;one in six homebuyers and nearly four million renters in America. ;http://www.FreddieMac.com ; ; Tips For Avoiding Borrowing Pitfalls Source: Freddie Mac ; Say NO to "easy money." Borrowers should beware if someone claims "credit ;problems won't affect the interest rate." Avoid solicitations for loans that ;sound too good to be true. If it sounds too good to be true, it probably is. ;If a solicitation is really interesting, get it in writing! ; 1. Shop around. Borrowers should talk to several lenders to find the best ;loan for which they qualify. A loan product or lending practice may not seem ;predatory until compared with a similar loan product offered by other lenders. ; 2. Understand the loan terms. Borrowers should compare loan terms from ;different lenders. Understand the best loan terms available in the marketplace ;and compare the APR (annual percentage rate) of loans from different lenders. ;The APR takes into account both the interest rate and the points and fees of ;the loan. A nonprofit housing counselor or a lawyer can review the information ;with a borrower. ; 3. Find out about prepayment penalties. Borrowers should know if the loan ;offered to them has a prepayment penalty. Prepayment penalty should be a ;choice, not a requirement. ; 4. Make sure documents are correct. Be cautious of someone who offers to ;falsify a borrower's income information to qualify for a loan. Borrowers ;should never falsify information or sign documents that they know to be false. ; 5. Make sure documents are complete. A borrower should not sign documents ;that have incorrect dates or blank fields. Be wary of promises that a lender ;will "fix it later" or "fill it in later." ; 6. Ask about additional fees. Borrowers should question any items they ;didn't ask for. Borrowers should also beware if they are told that single ;premium credit insurance is required get a loan, or that purchasing it will ;help loan approval. Review every fee and compare different lenders' fees to ;ensure the most competitive loan terms. ; 7. Understand the total package. Ask for written estimates that include ;all points and fees. The situation may not seem abusive until when everyone ;gets to the closing table. If any fees or charges differ from what was ;previously disclosed, delay the closing until all terms of the loan are ;clearly understood. ; 8. Work with credit counselors. A borrower should get all the facts ;before deciding to combine credit card or other debts into a home loan. Beware ;of scam credit counseling/ credit consolidation agencies -- unfortunately, not ;all credit counseling agencies are acting in your best interests. Talk to a ;community based consumer credit counseling agency or housing counselor before ;signing the loan documents. ; 9. Protect home equity. If borrowers are taking equity out of their ;property, they should take out the minimum amount needed. The equity in a home ;is a source of wealth, which builds up slowly over time. ; 10. If you're not sure, don't sign! Get advice first! Talk to a community ;based consumer credit counseling agency or housing counselor. ; ; ;

Source: PR Newswire