Title: CHALLENGES TO HOMEOWNERSHIP: Predatory Lending and Other Homeowner Fraud
1CHALLENGES TO HOMEOWNERSHIPPredatory Lending
and Other Homeowner Fraud
- Housing Forum
- May 20 2005
Stephen H. Olden Legal Aid Society of Greater
Cincinnati 215 E. Ninth Street Suite
200 Cincinnati OH 45202 (513)
241-9400 solden_at_lascinti.org
2New Buyers
- Predatory home purchase loans
- Hidden defects in home
- Sharp loan servicing practices
3Current Owners
- Predatory refinance loans
- Shoddy home repairs/remodeling
- Misunderstood reverse mortgages
4Outcomes for Homeowner
- Financial struggles/depleted savings
- Ruined credit
- Foreclosure/sheriff sale
5Outcomes for Neighborhood
- Foreclosures
- Investors/speculators in neighborhood
- Declining neighborhood
6Fair Housing Phenomenon
- Prime lenders and redlining
- Sub-prime lenders and reverse redlining
7Foreclosures Filed in Hamilton County
8Predatory Loans
- Sub-prime lender
- Appraiser
- Broker
- Title company
- Others
9Warning Signs
- High interest rate
- High closing fees
- Balloon payment/adjustable payments
- Falsified loan application
- No real benefit to borrower
- Home repair scam
- Debt consolidations (often unsecured debt)
10Targeted Victims
- Elderly
- New young
- Minorities
11Elderly
- High equity in homes
- Trusting ripe for con artists
- View crime as physical and with weapons
12New Young
- American Dream is appealing
- Lack financial knowledge
13Minorities
- Lack of access to credit channels
- Reverse redlining
- Discriminatory loan terms
14Home Purchases/Home Repairs
- Property flipping and ugly houses
- Investors
- Fly-by-night contractors
15Sharp Loan Servicing Practices
- Junk fees charges
- Unaccounted-for payments
- Lapsed insurance
- Hasty foreclosures
16Misunderstood Reverse Mortgages
- Complexities
- Equity depletion
- Alternatives not explored
17Whats Being Done
- Consumer education/counseling
- Industry clean-up
- Law enforcement
- Legislation
- Litigation
18Fountain Pen Predators
- Yes as through this world Ive wandered
- Ive seen lots of funny men
- Some will rob you with a six-gun
- And some with a fountain pen.
- And as through your life you travel
- Yes as through your life you roam
- You wont never see an outlaw
- Drive a family from their home.
- Woody Guthrie
- Pretty Boy Floyd (1939)
