Mayor Menino Warns "Don't Borrow Trouble"
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For Immediate Release
May 29, 2002
Released By:
Neighborhood Development
For More Information Contact:
dewayne Lehman
dlehman.dnd@ci.boston.ma.us

New Phase of Campaign Alerts Homeowners of Lending Scams

Mayor Thomas M. Menino today announced a new phase of his nationally known "Don't Borrow Trouble" campaign. The new public education efforts will include new 30-second television public service announcements in English and Spanish, new print ads for neighborhood newspapers, new billboards, seminars on predatory lending and refinancing, and mailings to homeowners targeted by unscrupulous lenders.

"The Don't Borrow Trouble campaign has helped us raise consumer awareness of predatory lending practices," said Mayor Menino. "We need to ensure that Boston's homeowners, particularly our most vulnerable residents, don't lose their homes. People in this city have worked too hard for their homes to be victimized by greed. If we can protect one homeowner today, that is one less foreclosed and abandoned property that we have to confront tomorrow."

Mayor Menino was joined today by Boston Housing Chief and Department of Neighborhood Development (DND) Director Charlotte Golar Richie, Freddie Mac Vice President of Community Development Lending Craig Nickerson, Massachusetts Affordable Housing Alliance Executive Director Tom Callahan, Massachusetts Consumer Affairs Director Jennifer Davis Carey, and housing advocates and leaders.

In 1999 Mayor Menino unveiled the "Don't Borrow Trouble" public awareness campaign to educate homeowners and homebuyers about predatory mortgage lending practices that put people's homes in jeopardy of being foreclosed on. The comprehensive program also includes intake counseling and referrals by the Boston Home Center and foreclosure intervention and prevention services through partner non-profits. Since its inception, Freddie Mac, as a partner, has adopted the program as a national model and helped 26 cities across the country begin or plan Don't Borrow Trouble programs in their cities.

The new phase of "Don't Borrow Trouble" will bring a renewed focus to the public education campaign with 10 new billboards in neighborhoods targeted by predatory lenders, advertisements in 19 local newspapers, seminars for homeowners on predatory lending and mortgage refinancing, and direct mailings to vulnerable homeowners warning them of predatory lending practices and urging them to call the Home Center if they would like assistance.

Subprime and predatory lenders focus their marketing in minority and low-income neighborhoods in the hopes they will reach people who are not aware that they can qualify for prime-rate loans. Their marketing encourages refinancing one's home to pay off other debts, make home improvements, get cash, take a vacation, and so forth. Unsophisticated borrowers, taken in by the "helpfulness and friendliness" of the lenders' representatives, make unwise decisions and accept loans that cost them more than they should have to pay.

Various recent reports have indicated a dramatic increase in refinancing loans made by subprime lenders, with a high cost to homeowners. Studies indicate that 51 percent of all refinancing loans in minority communities are from subprime lenders. Analysis of these loans by Fannie Mae show that fully half of those higher cost loans were made to people who qualified for, and should have been given, the lower cost, prime- rate loans.

The new phase of "Don't Borrow Trouble" is a direct response to combat predatory lending, focusing the public education efforts in the same areas targeted by unscrupulous lenders.

For more information about "Don't Borrow Trouble," visit www.dontborrowtrouble.com.

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