The federal Interagency Task Force
on Fair Lending has published a new brochure that alerts consumers to potential
borrowing pitfalls, including high-cost home loans, and provides tips for
getting the best financing deal possible.
The brochure, Putting Your Home on the Loan
Line is Risky Business, warns that regardless of whether a home equity
loan is for a home repair, bill consolidation or some other purpose, it is
important to shop around.
Borrowing from an unscrupulous lender, especially one that offers a high-cost loan using the home as security, could
result in the loss of the borrower’s home and their money. The brochure cautions that certain lenders--often called
“predatory lenders”--target homeowners with low incomes or credit problems,
including the elderly, by deceiving them about loan terms or giving them loans
they cannot afford to repay. Before
signing the credit contract, consumers are encouraged to
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Think about their financing options
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Do their homework
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Think twice before they sign a loan contract
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Know that they have rights under the law
The brochure notes that many consumers may have other options for
meeting their financial needs besides taking out a home equity loan.
Housing counseling and social service programs are available to assist
people with financial problems.
If consumers decide that a loan is right for them, the brochure suggests
talking with several lenders; comparison shopping for interest rates, payments,
term of the loan, points and fees, and other costs of the loan; and having a
knowledgeable friend, attorney, or housing counselor review the loan documents.
A shopping checklist is included with the brochure.
The publication also reminds consumers that if
they are refinancing or using their home as security for a home equity loan (or
for a second mortgage loan or a line of credit), federal law gives them three
business days after signing the loan papers to cancel the deal.
The cancellation must be submitted in writing, after which the lender is
required to return any money the consumer has paid to date.
If the three-day period has already passed and
consumers believe they have been misled, the brochure suggests that they
contact a state or local bar association, a local consumer protection agency,
or a local fair housing or housing counseling agency.
The members of the Interagency Task Force include the Department of
Housing and Urban Development, Department of Justice, Federal Deposit Insurance
Corporation, Federal Housing Finance Board, Federal Reserve Board, Federal
Trade Commission, National Credit Union Administration, Office of the
Comptroller of the Currency, Office of Federal Housing Enterprise Oversight,
and Office of Thrift Supervision.
The brochure is available on the agencies’ web sites listed below.
A PDF (Portable Document Format) version is provided on the web site so
that consumer groups, financial institutions, agencies, and other organizations
can download and print copies for distribution to their clients and customers.
It includes a space on the back panel for organizations to provide their own
contact information. A Spanish-language version of the publication will be
available in the future.
Single copies of the brochure are available free of charge from
the following agencies:
Department of Housing and Urban Development: The Department's
web site at http://www.hud.gov or U.S. Department of Housing and Urban
Development, 451 Seventh Street, S.W., Washington, D.C. 20410; Customer Service
Center: (202) 708-3151.
Department of Justice: The Department's web site at
http://www.usdoj.gov or contact the U.S. Department of Justice, Civil Rights
Division, 950 Pennsylvania Ave., N.W., Housing and Civil Enforcement Section,
NWB, Washington, D.C. 20530; (202) 514-1116.
Federal Deposit Insurance Corporation: The FDIC's web site at
http://www.fdic.gov or the FDIC's Public Information Center, 801 17th Street,
N.W., Room 100, Washington, D.C. 20434; (877) 275-3342 or (202) 416-6940.
Federal Housing Finance Board: The Board's web site at
http://www.fhfb.gov and from the Federal Housing Finance Board, 1777 F Street,
N.W., Washington, D.C. 20006.
Federal Reserve Board: The Board's web site at
http://www.federalreserve.gov/ pubs/riskyhomeloans/default.htm and from
Publications, Stop 127, Federal Reserve Board, 20th & C Streets, N.W.,
Washington, D.C. 20551; (202) 452-3245.
Federal Trade
Commission: The FTC's web site at http://www.ftc.gov and from the FTC’s
Consumer Response Center, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580;
toll free: 1-877-FTC-HELP (1-877-382-4357); TTY for the hearing impaired (866)
653-4261.
National Credit Union Administration: NCUA's web site at
http://www.ncua.gov or contact Cliff Northup, Director of Public &
Congressional Affairs, National Credit Union Administration, 1775 Duke Street,
Alexandria, Va. 22134.
Office of Federal Housing Enterprise Oversight: The Office's
web site at http://www.ofheo.gov. E-mail
requests for individual copies should be sent to ofheoinquiries@ofheo.gov or
call (202) 414-6922.
Office of the Comptroller of the Currency: The OCC's web site
at http://www.occ.treas.gov and from Communications, Mail Stop 3-2, Office of
the Comptroller of the Currency, 250 E Street, S.W., Washington, D.C. 20219;
(202) 874-4700.
Office of Thrift
Supervision: The OTS's web site at http://www.ots.treas.gov
or contact Louise Batdorf, Office of
Thrift Supervision, 1700 G Street, N.W., Washington, D.C. 20552; (202)
906-7087.
# # #
HUD
Michael Fluharty
(202) 708-0685 Ext. 6605
DOJ
Jorge Martinez
(202) 514-2007
FDIC
David Barr (202)
898-6992
FHFB
Carter Wood
(202) 408-2817
FRB
Susan Stawick (202) 452-2955
FTC
Brenda Mack (202)
326-2182
NCUA
Cliff Northup (703) 518-6331
OCC
Dean DeBuck (202) 874-5770
OFHEO
Corinne Russell
(202) 414-6922
OTS
Chris Smith (202)
906-6677