Activists Take Action Against Supposedly Predatory Mortgage Lenders
Community activist Jenelle Dame has a secret weapon to hit back at the predatory mortgage lenders blamed for putting millions of Americans at risk of losing their homes: she calls in the sharks.
“We go to their office and bring people and signs and little plastic sharks — like loan sharks. We put sharks all around their offices,” said Dame, an organizer in the nonprofit East Side Organizing Project in the Cleveland, Ohio housing market, which had the nation’s highest foreclosure rate last year.
The loan-shark protests are small but effective, drawing unwanted publicity to subprime-mortgage lenders who are already on shaky ground following a surge in defaults on their high-interest, bad credit home loans to people with low incomes.
Housing analysts predict between 1 million and 3 million U.S. homes will be foreclosed upon in 2007. Already, defaults on subprime mortgages have hammered stock prices and roiled the mortgage industry. Some economists say the problems could worsen a housing slowdown and squeeze the U.S. economy.
In the absence of tough federal regulations on predatory lenders, activists like Dame are often filling the void.
With protests, public campaigns and knowledge of the law, they are attempting to impose oversight on subprime lenders who offered easy credit for homes that are turning out to be too expensive for millions of Americans as mortgage rates go up.
Seven lenders in Ohio now work with Dame’s group, helping financially troubled homeowners renegotiate debts and preventing about 600 foreclosures in two years, she said.
Danny Wagener, an organizer at the nonprofit Iowa Citizens for Community Improvement in Des Moines, said, “Initially it was very difficult to even get these lenders to come to a meeting and talk to people whose homes were being foreclosed.”
“We had to do these actions or house calls where we would take a significant group of people to their office and say ‘Hey these are the problems your [Iowa mortgage] borrowers are having; you need to come meet with us and talk to us about this,’” he said.
His group protested and picketed lenders mostly between 2002 and 2004 at the height of the subprime lending boom, when home prices were on the boil. The effort forged relationships with several important lenders, including Ameriquest Mortgage Co., a major U.S. subprime-mortgage lender.
“We would work with these lenders so people could stay in their homes, and in many cases be compensated for an unfair interest rate they were given, or a prepayment penalty they were misled about, or some component of their loan that was done unethically in our opinion,” he said.
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