The following is a press release from the Piedmont Housing Alliance

SUBJECT: Don't Borrow Trouble Campaign/Anti-Predatory Lending - September 20, 2007

CONTACT: Shelley Murphy, Director of Program Services, (434) 817-2436

CHARLOTTESVILLE, VA --- Don't Borrow Trouble Campaign/Anti-Predatory Lending Services. Piedmont Housing Alliance (PHA)'s Regional Home Ownership Center (RHOC) has been a leader in educating the public and counseling clients about purchasing a home, consolidating debt, reverse mortgage counseling, mortgage foreclosure prevention, fair lending, fair housing and predatory lending in the Thomas Jefferson Planning District. Predatory lending involves abusive lending practices that include targeting vulnerable consumers with high-cost home loans without regard to the borrower's ability to repay the loan. Last year, PHA conducted 44 Financial Literacy classes and trained 466 participants and 65 predatory lending classes for 225 people. PHA partnered with Wachovia to use the Money Smart curriculum. According to Wachovia, one-fifth of all Money Smart participants statewide were educated here at PHA.

Predatory mortgage loans sometimes end in foreclosure. Predatory lending is a subset of the subprime mortgage industry. Payday lending falls under abusive lending practices sometimes referred to as payday loans, cash advance loans, check advance loans, post dated check loans or deferred deposit check loans. According to Virginia Partnership to Encourage Responsible Lending (VaPERL), a statewide advocacy group shares there are over 400,000 Virginians paying interest rates over 300%. VaPERL and member groups like Piedmont Housing Alliance are lobbying the state for an interest rate cap of 36%. The city of Staunton, recently unanimously passed a resolution that will ask the General Assembly to cap rates at 36 percent for all consumer loans in Virginia. Piedmont Housing Alliance supports the City of Charlottesville on their efforts to eradicate the local predatory lending practices in our community. Washington D.C, on 9/18/07 voted 12 to 1 to enact an ordinance repealing the payday lending exemption from the District's 24% annual rate cap.

Virginia is the only state in the mid-Atlantic (besides Delaware) that still has triple digit interest rates. Freddie Mac and other local community based organizations who partnered with PHA state that the best defense against predatory lending is education. Understanding homeowner rights and the home buying process is an important first step in protecting families and their homes. People are often bombarded by aggressive marketing campaigns for various refinance and home equity loan products which may not be the best alternative, and which over the long run may jeopardize not only the homeowners' financial health but also the stability of neighborhoods.

Don't Borrow Trouble is a two-pronged program which combines an extensive public education campaign with comprehensive counseling services to help homeowners and renters avoid scams and resolve any financial difficulties they may be experiencing in an informed and prudent manner. It is the first comprehensive consumer awareness/foreclosure prevention campaign of its kind pioneered in Boston by Mayor Thomas M. Meniono and the Massachusetts Community and Banking Council. PHA uses materials such as brochures, mailings, posters, public service announcements to inform the public that a reliable source of information is available if they are considering taking out a loan or to provide assistance if they have already taken out a loan.

PHA is a U.S. Department of Housing and Urban Development (HUD) Certified Housing Counseling Agency that provides comprehensive housing counseling services at no cost to the client. If a person is caught in the web of a predatory loan they should contact PHA. Clients will complete an intake form, gather documents, and meet with a Certified Housing Counselor to assess the situation, identify available resources, and seek alternatives. The Regional Home Ownership Center provides ongoing free education classes that include Financial Literacy/Money Management & Budgeting, monthly Homeownership Education Classes focused on home purchase and a Community Education (the next one is scheduled for September 26 at 6:30pm at CAAR) class on Fair Housing-Know your Rights, How to Avoid the Predatory Lending Trap, Introduction to Disaster Preparedness and Tips on how to avoid Default/Delinquency and Foreclosure.

Piedmont Housing Alliance has also scheduled a "Don't Borrow Trouble" class to be held October 24, from 6:30-8:30 pm at the Charlottesville Area Association of Realtors (CAAR) at 550 Hillsdale Drive. This class provides an overview of the fair housing and lending laws and how to avoid becoming a victim of predatory lending. Contact PHA at 434-817-2436 to reserve a seat.

(Electronic mail, September 21, 2007)