Infotainment for Americans 50+

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DO UNTO OTHERS IS THE RULE, NOT THE EXCEPTION

By Dee Taylor

Prime Time Productions, Inc.

AARP Communications Specialist

In March I was contacted by AARP to attend a press interview involving a woman who had been preyed upon by a predatory lender in Oak Cliff, Texas. I went with open eyes, but what I learned shocked and saddened everyone attending that day. These predatory mortgage lenders are real and they obviously never heard of the Golden Rule, "Do Unto Others," or they would never even attempt such a practice.

Predatory mortgage lenders have no mercy. Brenda Roberts figured that out after they came knocking at her door, with their "unbelievable" offer, and after she had contracted for a home repair loan of $40,000 at 16% interest rate. She later learned, with that interest rate, that meant she now owed the lender $160,000 which she could never live long enough to pay off. Her story is an example of why a coalition of various groups which include

• AARP,
• Consumer Union;
• ACORN (Association of Community Organizations for Reform Now);
• the Texas Low-Income Housing Information Service and
• TUHP (Texas United Housing Program)

"I believed what they told me, " Mrs. Roberts said at the news conference held at her home in Oak Cliff. "I trusted them. They told me this was good deal for me and later I found it just wasn't true."

What happened to Mrs. Roberts, who lives in a suburban neighborhood of Dallas, has also happened to other homeowners across the state. Mrs. Roberts is telling her story to keep her neighbors from making the same mistake. She wants them to know that these lenders prey particularly on the elderly, low-income and minority homeowners. Folks who do not have the ability to ever pay back a loan but have a large equity in their homes, are targeted by these predatory lenders. They know those high interest loans will often lead to foreclosures.

"By pushing people into bad loans, predatory lenders are all but ensuring themselves a payoff, " said Rob Schneider of Consumer Union. "If the borrower makes the monthly loan payments, the lender makes a tremendous profit. If the borrower is unable to make the monthly payments, the lender forecloses and takes the home."

"Eight out of every 10 Americans over the age of 65 own their homes free of any mortgage," said AARP volunteer, Peggy Wildman. "Unfortunately, unscrupulous lenders target many of these homeowners whose aging homes may need some repair. They aggressively market home equity loans, in every manner imaginable, knowing the homeowners may be unable to repay that loan."

To raise your awareness of these sleazy but smooth operators, the bottom line is this if you are thinking of taking out a mortgage loan of any kind:

• Always read the fine print with every loan.
• Always work with your own bank if possible, where you already have a checking or savings account.
• Always get three quotes in writing from three different lenders. (Look at a Reverse Mortgage Loan too.)
• Always ask for an "Amortization Schedule," and
• Always watch out for variable interest loans. You could end up owing more at the end of the loan then you did at the start.

They didn't tell Brenda Roberts she could lose her home, and they won't tell you either. Granted sometimes there are benefits to using your home equity, and there are legal mortgage lenders, but if the loan costs too much, the benefits disappear and so might your home. So, if you are thinking about using your home equity to borrow money, first order your free copy of the "Borrower's Guide to Home Loans" from AARP Fulfillment EEO1484, 601 E. Street, NW, Washington, DC 20049. This is a must read because "Do unto others is the rule, not the exception", every time, all the time.

You can watch this subject being discussed by Dee Taylor and others on "Sizzlin' Seniors" television programming at 12 noon and 7pm each day on Channel A-14, Time Warner in the month of April 2002.

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Last Updated on November 4, 2004

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