Freddie Mac, Arizona Officials Target Predatory Lending

Instead of borrowing trouble, officials are hoping that potential Arizona mortgage applicants will take some free advice instead.

Local government and non-profit agencies, along with mortgage giant Freddie Mac, are trying to reduce predatory lending practices in the Grand Canyon State and beyond through a campaign entitled Don’t Borrow Trouble Pima County.

The consumer education campaign is based on a Freddie Mac program that has been used in more than 40 metropolitan areas across the United States, the Arizona Daily Star reports today.

Freddie Mac says a predatory mortgage lender can employ a variety of illicit tactics, including repeatedly refinancing a loan over a short period of time while charging fees, including those fees for credit insurance and not fully disclosing the charge, and charging home mortgage rates above what a borrower could qualify for.

The program is beginning with a publicity campaign about the dangers of predatory lending and a local telephone hotline which offers advice about home loans and referrals to local agencies for more information on how consumers can ensure fair treatment by a home mortgage company.

Although a full-time program coordinator has yet to be hired, calls are being taken at the hotline. Each call will be “triaged” and referred to agencies that may be able to offer advice or help resolving the home loan issues, said Sandy Fagan of the Southwest Fair Housing Council.

The yearlong program has a budget of about $67,000, not including contributions from participants, said county Supervisor Richard Elias, whose office will oversee the mortgage loan program.

The AARP, the Arizona Attorney General’s Office, Hughes Federal Credit Union and Southern Arizona Legal Aid are among the more than two dozen participants. Elias said he hopes to expand the program by finding new funding sources and bringing in more participants like local mortgage brokers.