 |
Forum/Blog
Volunteer
Español
|
America's Best Mortgage!
One Mortgage Product - $10 Billion Committed
|
|
4.125%
|
Fixed 30 Year (as of 9/9/2010)
No Down Payment, No Closing Costs
|
|
|
|
|
PREDATORY LENDING CAMPAIGN – 1991 – 2000
Documenting lending corruption and exploitation
In the wake of government deregulation, the 1980s were a tumultuous period for the banking industry, capped by the savings and loan crisis. Despite the industry’s speculative excesses, there was a shortage of credit for working people who sought affordable home mortgages. Even people who had obtained funds for down payments and closing costs were denied conventional loans. The problems ran deeper and more broadly than the Hotel Workers Union–Local 26 had been able to address with the Housing Trust Fund, so Local 26 and Bruce Marks launched the Union Neighborhood Assistance Corporation (UNAC), which would pursue the housing agenda further.
The denial of credit was particularly common among minority and lower-income people, which demonstrated that banks were “redlining” certain neighborhoods, i.e. writing off entire areas as undesirable investments. What the public did not know was that the vacuum in these communities created a breeding ground for predatory lenders that made monies readily available on exploitative terms. This underground financial system had never been documented, and those who knew about it were often afraid to speak out.
UNAC began obtaining evidence of this corrupt system in 1989. UNAC discovered that the finance companies were preying on longtime homeowners who were property rich but cash poor. These homeowners had a significant amount of equity in their homes—an untapped reserve that the finance companies were eager to strip-mine. People who were in desperate need of home repairs and cash were offered loans that sounded great but actually contained unaffordable terms, unexpected fees and surprises. The lenders enticed these predominately elderly, lower-income and minority individuals to take on more debt, with the intention of eventually foreclosing on their homes by imposing unbearable interest rates and fees. Eventually, many people lost their homes to these loan scams.
Finding links to major banks
UNAC documented many such cases but could not determine who these finance companies were and who backed them. Miles Iyamu, a real estate broker, provided the missing link when he came to UNAC researchers with evidence connecting the hard-money lenders to major banks. This resolved the mystery of why some banks had been avoiding these communities—by denying credit on affordable terms they were able to reap greater profits by financing the predatory lenders who took their place! With Iyamu’s lead, UNAC uncovered the companies and individuals involved not just in Massachusetts but throughout the eastern United States.
NACA became the driving force behind the research into, exposure of and advocacy against second mortgage scams. The focus was Fleet Bank.
|
|
|
E-mail
Print