October 18, 2006
community receives a home loan before getting all the information they
need. The result, to their dismay, is that the loan includes all kinds
of hidden costs. That's when the couple hears a word they hoped they
would never hear: foreclosure.
We know the cause of this all-too-common situation: predatory lending.
Far too often, consumers are prey to predatory lenders who con
consumers into paying more than they can afford.
pilot program in Illinois that combats predatory lending is benefiting
consumers, communities and honest lenders. Through this new program,
the Predatory Lending Database Pilot Program, the Illinois Department
of Professional Regulation tracks mortgage transactions in 10 of the
hardest hit ZIP codes in the Chicago area in a predatory lending
Meanwhile if a loan meets certain triggers, a
borrower is referred to counseling with a Department of Housing and
Urban Development-certified housing counseling agency.
however, a few critics claim that this program is somehow "redlining"
those communities. We have seen these scare tactics before; they spread
a false message and can distract people from the very real dangers of
In reality, by law, the program targets only communities with high foreclosure rates, not specific groups of people.
Meanwhile a few critics claim that people in these communities will not
be able to get a loan at all. Let's take a look at what lenders are
Yes a very tiny percentage of lenders say they
are pulling out of certain neighborhoods because of this program. An
even larger number of lenders, however, are redoubling their efforts to
lend in these communities.
Bottom line? Consumers who want to
find a responsible lender in these communities will be able to do so.
Consumers are also benefiting from education provided through this new
Malcolm Bush, President, The Woodstock
Raul Raymundo, CEO, The Resurrection Project;
Executive director, Greater Southwest Development Corp.;
Villarreal, Director of Counseling Services, Southwest