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 this week in New York
 (April 17) and California (April 17 and 18), and next week (April 24) in Ohio.
 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 (http://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.
 
     Launch activities will begin in New York today (April 17), with a press
 conference at the Capitol in Albany that will focus in part on current anti-
 predatory lending legislation and on homeowners who have been victimized.
     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. TV star Doris Roberts will
 participate in the Los Angeles event.
     Ohio AARP will hold a press conference April 24 at the Cleveland home of
 one of the victims in a predatory lending case in which AARP Foundation
 Litigation is legal counsel.
 
     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 this week in New York
 (April 17) and California (April 17 and 18), and next week (April 24) in Ohio.
 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 (http://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.
 
     Launch activities will begin in New York today (April 17), with a press
 conference at the Capitol in Albany that will focus in part on current anti-
 predatory lending legislation and on homeowners who have been victimized.
     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. TV star Doris Roberts will
 participate in the Los Angeles event.
     Ohio AARP will hold a press conference April 24 at the Cleveland home of
 one of the victims in a predatory lending case in which AARP Foundation
 Litigation is legal counsel.
 
     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