Tips On Avoiding Predatory Lending

Predatory lending has really become an important topic, filtering into the mainstream. Mitchell A. Kamin, CEO of Bet Tzedek Legal Services, recently gave Dear Abby these tips to avoid predatory lending:

Seniors can do several things to avoid being taken advantage of.

First: Any senior facing financial problems should confide in family and friends. Each year, homeowners consult us because they’re in imminent danger of losing their homes and they were too ashamed to ask family members or friends for help or advice until it was too late. Shame too often drives seniors to strangers who promise quick fixes.

Second: Seniors who are behind on their mortgage should contact their lender. If possible, the lender will try to work something out with the borrower to avoid foreclosure. For help working with the lender, the senior should call a HUD-certified counseling agency, which can give the senior advice on all available financial options.

Third: Stay away from people who come to the door offering to “rescue” the house from foreclosure!

And finally, people thinking about obtaining a home loan should be sure they understand the language in their loan documents before signing them and should be particularly careful before agreeing to an adjustable-rate loan.

Not to be outdone, Dear Abby provided a few additional resources for people of all ages who may have been affected:

(1) Your local Department of Consumer Affairs. Most local municipalities have one, often with a public complaint phone number.

(2). The U.S. Department of Housing and Urban Development (HUD).

(3) Local law enforcement. Many police departments and prosecutors have units to deal with financial crimes and abuse.

(4) The National Consumer Law Center, which offers referrals and resources for consumers.

(5) ACORN. Its Web site – www.acorn.org – has information about local offices and resources available nationally. You may also call (866) 67-ACORN.