Campaign targets predatory lending

Deseret News (Salt Lake City), Jan 19, 2008 by Jasen Lee Deseret Morning News

Amid the current housing crisis, Salt Lake County and a coalition of public and private organizations are launching an educational campaign aimed at preventing predatory lending practices.

The program, called "Don't Borrow Trouble," assists consumers through a toll-free help line at 866-217-1718. The hotline is staffed by trained professionals who offer free assistance to individuals seeking information about purchasing a home, refinancing, consolidating debt and foreclosure prevention, according to coalition partner Freddie Mac. The program was unveiled Friday at a news conference with local government and business leaders.

"It's important when we have quite a few folks who are suffering from subprime loans that we educate them before they get to that point, but we also need to have a mechanism set up to help those already in that scenario," said Sergio Barajas, manager with Freddie Mac, a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing.

Barajas said the program gives individuals a place where they can access responsible lending products or find help to resolve any current difficulties.

He said the campaign was initiated in Boston and has been established in over 40 locations nationwide using the help line, brochures, public service announcements and workshops to educate consumers who are most vulnerable to predatory lending practices, including seniors, minorities and low-to-moderate income individuals.

"Buying a home is one of the most important financial decisions most people make in their lifetimes, and unfortunately, there are many lenders out there preying on innocent people," said Salt Lake County mayor Peter Corroon. "Generally, it's those who can least afford to be preyed upon."

Corroon said that sometimes even the most sophisticated and educated people are targeted by fraudulent lenders, so it's important for people to be wary of potential scam artists.

The "Don't Borrow Trouble" campaign is the first line of defense for consumers against predatory lending practices, said Sheri Fitzpatrick, chief executive officer of Perfect Home Living Inc., a Utah-based nonprofit group that offers resources to individuals on real-estate fraud research and works to establish policy that prevents fraud.

"There are people who will go over documents with consumers, explain what's going on so that they don't get caught up in some of the problems we've been having," she said.

E-mail: jlee@desnews.com