MAYORS HERENTON, WHARTON JOIN FREDDIE MAC, MEMPHIS COALITION TO LAUNCH DON'T BORROW TROUBLE ANTI-PREDATORY LENDING CAMPAIGN

Residents Urged to Call (901) 432-4621 for Counseling, Advice to Avoid Lending Scams

Memphis, TN – Memphis Mayor Willie Herenton, Shelby County Mayor A C Wharton Jr., Freddie Mac and a coalition of more local public and private organizations today launched an aggressive new consumer outreach campaign to eradicate predatory lending in Memphis and Shelby Counties. Don't Borrow Trouble Memphis encompasses an extensive public education campaign with comprehensive counseling services to help families avoid scams and resolve financial difficulties in an informed manner. The Don't Borrow Trouble Memphis hotline number is (901) 432-4621.

"The Don't Borrow Trouble initiative is a cutting edge effort that brings both the public and private sectors together in a collaborative effort to empower individuals and families to take the necessary steps toward homeownership. Don't Borrow Trouble will address the critical misstep many Memphians have made—the development of a poor credit rating—and teach them how to overcome this mistake and get on a sound financial footing," said Memphis Mayor Willie W. Herenton

"Homeownership strengthens our families and our neighborhoods. Thus, it is imperative that we encourage people who have not traditionally functioned in the broader economy, but want to own their own homes, to take the proper steps. We must make sure that they don't get burned when they attempt to do so because, if they get hurt when the try to join the broader economy, the problems that result will ripple into succeeding generations. By working together through programs such as Don't Borrow Trouble, we can protect our citizens from lending practices that can ruin their personal credit and weaken our community,'' said A C Wharton, Jr., Mayor, Shelby County, Tennessee.

Local officials say Memphis' high poverty rate and nation leading incidence of bankruptcy make their city a hotbed of predatory lending. Don't Borrow Trouble Memphis use a wide range of proven advertising to better inform the public about predatory lending scams, such as excessive fees, inflated interest rates, or punishing clauses, that lock borrowers into loans they cannot truly afford. The new campaign will also direct the public to a Don't Borrow Trouble hotline, where trained counselors can help answer consumers' questions and refer them to appropriate legal or financial experts.

"Predatory lending practices attack the heart of our communities. These practices can strip away home equity and trap unwary borrowers in a dismal cycle that ultimately replaces homeownership with foreclosure," said Vaughn Irons, National Director of Community Development at Freddie Mac. "Don't Borrow Trouble is a tested campaign that gets results and we are delighted to join with Mayor Herenton, and the Memphis Don't Borrow Trouble Coalition to make it work for Memphis and Shelby County families."

Don't Borrow Trouble Memphis campaign is the latest Freddie Mac effort to expand responsible homeownership in the Memphis area. Over the past five years, Freddie Mac has invested nearly $4.4 billion in the Memphis area helping some 37,000 families own homes.

The goals of Don't Borrow Trouble are to:

• Reduce and ultimately eradicate predatory lending practices in Metro Memphis.
• Educate borrowers about the dangers of predatory lending and provide them with helpful resources.
• Coordinate access to homebuyer assistance programs offered by initiative participants.
• Promote the importance of good financial management and avoiding credit/debt problems.
• Promote the importance of buying homes that the consumer can afford, ultimately reducing high foreclosure loans

The Memphis Area Legal Services is the lead agency coordinating Don't Borrow Trouble Memphis and plans to use television, radio, billboard advertising, and grassroots consumer education programs to warn residents about predatory lending practices in the Memphis metro area.

"Homeownership is a part of the American dream. Yet, for those who fall prey to unscrupulous and illegal lending practices it can be a disaster. It robs homeowners of their equity
and it destroys communities," said Jackie Cobbins Program Manager of the Memphis Area Legal Services' Fair Housing Center.

"Don't Borrow Trouble is a vital tool that will provide a necessary resource in addressing issues relating to questionable lending practices in Memphis and Shelby County," said E. Michael Yarber, Manager, Fair Housing and Community Outreach at the Shelby County Department of Housing.

Other organizations participating in the Don't Borrow Trouble campaign include the Memphis Division of Housing and Community Development, the Community Development Council, the Memphis Area Community Development Organization, and the Memphis DEBT Collaborative, which includes 80 public, private, for-profit, nonprofit, government and business organizations that are dedicated to reducing bankruptcy and foreclosure by improving financial literacy and wellness.

First piloted in Boston by Mayor Thomas M. Menino and the Massachusetts Community & Banking Council, Freddie Mac has now expanded Don't Borrow Trouble throughout the nation.

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to create a continuous flow of funds to mortgage lenders in support of homeownership and rental housing. Freddie Mac purchases mortgages from lenders and packages them into securities that are sold to investors. Over the years, Freddie Mac has opened doors for one in six homebuyers in America.

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