AARP Launches Drive Against Unscrupulous Mortgage Lenders

Apr 17, 2001, 01:00 ET from AARP

    WASHINGTON, April 17 /PRNewswire/ -- AARP, alarmed at repeated reports of
 wide-scale predatory mortgage lending abuses, is mounting a national campaign
 to fight the problem.
     Built around AARP's state legislative and litigation priorities, the
 campaign will link advocacy on behalf of older borrowers with a major consumer
 education initiative.
     The campaign will kick off with state-based events today in California
 (April 17 and 18).  Over the course of the year, AARP plans to launch its
 education and advocacy campaign in other states as legislators begin to
 consider predatory mortgage lending issues.  More than eighty percent of
 Americans 50 and older are homeowners.
     Predatory lending is a collection of unfair and deceptive practices used
 by some lenders to pressure homeowners into signing up for high cost and often
 unaffordable mortgage loans.  The predatory lender manipulates individuals
 into obtaining a loan that they may not be able to pay off.  Frequently, older
 homeowners are ensnared in abusive loans because they are persuaded to borrow
 funds for home repairs, to cover health costs or to consolidate debts.
     "There is an outrageous downside to the rosy scenarios offered by
 unscrupulous lenders," said AARP Associate Executive Director Dawn Sweeney.
     "There is ample evidence -- starting with dozens of interviews that we
 have had in recent months with victims of abusive lenders -- that people are
 sold loans as a miracle financial cure," Sweeney added.  "Many homeowners are
 then stunned to find out that they cannot afford to pay off those loans and
 they may lose their homes."
     With a theme:  "They Didn't Tell Me I Could Lose My Home," AARP's campaign
 will:
 
     --  Offer an AARP toll-free number to consumers in the states targeted for
         the campaign.  Consumers who call the hotline can order a borrowers'
         kit and obtain information about sources of assistance available
         nationally and in their states.
 
     --  Accelerate its drive to win approval by state legislatures of measures
         to curb predatory lending.
 
     --  Enhance its efforts to fight abusive lenders through its AARP
         Foundation Litigation attorneys.
 
     --  Provide a borrowers' kit with consumer tips and a checklist for those
         considering home equity loans, as well as fact sheets for dealing with
         home improvement contractors and reverse mortgages.  The kit will
         advise consumers to consider all the costs and fees when taking a
         loan.  The kit also will include an anti-predatory lending decal that
         can be displayed conspicuously at the consumer's home.
 
     --  Establish a web page (www.aarp.org/homeloans) that features consumer
         fact sheets and links to other sources of assistance and information.
 
     --  Support the campaign with transit and newspaper ads, as well as radio
         spots, in both Spanish and English.
 
     AARP's efforts will be coordinated in individual states with law
 enforcement officials, state attorneys general, consumer advocates, and
 minority and community organizations.
     Predatory lending has been described by federal agencies as involving one
 or more of these elements:  providing unaffordable loans based on the
 borrower's assets, rather than on ability to pay; inducing a borrower to
 repeatedly refinance in order to charge high fees or points; or engaging in
 fraud or deception to hide some of the cost features of a loan.
     AARP's state advocacy efforts are seeking to limit or prohibit these and
 the following additional predatory lending practices related to some home
 loans:
 
     --  Charging unfair prepayment penalties;
 
     --  Packing single premium credit and non-credit insurance products, and
         other excessive costs and fees in the amount of the loan;
 
     --  Requiring pre-dispute mandatory arbitration;
 
     --  Engaging in unfair, deceptive, and unconscionable practices in
         connection with the consumer credit transaction;
 
     --  Including balloon payments that lock borrowers into predatory loans.
 
     California AARP will conduct press conferences today in Los Angeles and on
 Wednesday (April 18) in Oakland.  California Attorney General Bill Lockyer
 will be among those participating in the events.  Emmy award winning actress
 Doris Roberts will participate in the Los Angeles event.
 
     AARP is the nation's leading organization for people 50 and older.  It
 serves their needs and interests through information and education, advocacy
 and community services which are provided by a network of local chapters and
 experienced volunteers throughout the country.  The organization also offers
 members a wide range of special benefits and services, including Modern
 Maturity and My Generation magazines and the monthly Bulletin.
 
 

SOURCE AARP
    WASHINGTON, April 17 /PRNewswire/ -- AARP, alarmed at repeated reports of
 wide-scale predatory mortgage lending abuses, is mounting a national campaign
 to fight the problem.
     Built around AARP's state legislative and litigation priorities, the
 campaign will link advocacy on behalf of older borrowers with a major consumer
 education initiative.
     The campaign will kick off with state-based events today in California
 (April 17 and 18).  Over the course of the year, AARP plans to launch its
 education and advocacy campaign in other states as legislators begin to
 consider predatory mortgage lending issues.  More than eighty percent of
 Americans 50 and older are homeowners.
     Predatory lending is a collection of unfair and deceptive practices used
 by some lenders to pressure homeowners into signing up for high cost and often
 unaffordable mortgage loans.  The predatory lender manipulates individuals
 into obtaining a loan that they may not be able to pay off.  Frequently, older
 homeowners are ensnared in abusive loans because they are persuaded to borrow
 funds for home repairs, to cover health costs or to consolidate debts.
     "There is an outrageous downside to the rosy scenarios offered by
 unscrupulous lenders," said AARP Associate Executive Director Dawn Sweeney.
     "There is ample evidence -- starting with dozens of interviews that we
 have had in recent months with victims of abusive lenders -- that people are
 sold loans as a miracle financial cure," Sweeney added.  "Many homeowners are
 then stunned to find out that they cannot afford to pay off those loans and
 they may lose their homes."
     With a theme:  "They Didn't Tell Me I Could Lose My Home," AARP's campaign
 will:
 
     --  Offer an AARP toll-free number to consumers in the states targeted for
         the campaign.  Consumers who call the hotline can order a borrowers'
         kit and obtain information about sources of assistance available
         nationally and in their states.
 
     --  Accelerate its drive to win approval by state legislatures of measures
         to curb predatory lending.
 
     --  Enhance its efforts to fight abusive lenders through its AARP
         Foundation Litigation attorneys.
 
     --  Provide a borrowers' kit with consumer tips and a checklist for those
         considering home equity loans, as well as fact sheets for dealing with
         home improvement contractors and reverse mortgages.  The kit will
         advise consumers to consider all the costs and fees when taking a
         loan.  The kit also will include an anti-predatory lending decal that
         can be displayed conspicuously at the consumer's home.
 
     --  Establish a web page (www.aarp.org/homeloans) that features consumer
         fact sheets and links to other sources of assistance and information.
 
     --  Support the campaign with transit and newspaper ads, as well as radio
         spots, in both Spanish and English.
 
     AARP's efforts will be coordinated in individual states with law
 enforcement officials, state attorneys general, consumer advocates, and
 minority and community organizations.
     Predatory lending has been described by federal agencies as involving one
 or more of these elements:  providing unaffordable loans based on the
 borrower's assets, rather than on ability to pay; inducing a borrower to
 repeatedly refinance in order to charge high fees or points; or engaging in
 fraud or deception to hide some of the cost features of a loan.
     AARP's state advocacy efforts are seeking to limit or prohibit these and
 the following additional predatory lending practices related to some home
 loans:
 
     --  Charging unfair prepayment penalties;
 
     --  Packing single premium credit and non-credit insurance products, and
         other excessive costs and fees in the amount of the loan;
 
     --  Requiring pre-dispute mandatory arbitration;
 
     --  Engaging in unfair, deceptive, and unconscionable practices in
         connection with the consumer credit transaction;
 
     --  Including balloon payments that lock borrowers into predatory loans.
 
     California AARP will conduct press conferences today in Los Angeles and on
 Wednesday (April 18) in Oakland.  California Attorney General Bill Lockyer
 will be among those participating in the events.  Emmy award winning actress
 Doris Roberts will participate in the Los Angeles event.
 
     AARP is the nation's leading organization for people 50 and older.  It
 serves their needs and interests through information and education, advocacy
 and community services which are provided by a network of local chapters and
 experienced volunteers throughout the country.  The organization also offers
 members a wide range of special benefits and services, including Modern
 Maturity and My Generation magazines and the monthly Bulletin.
 
 SOURCE  AARP