CONGRESSMAN CLAY LAUNCHES FIRST ST. LOUIS ANTI-PREDATORY LENDING CAMPAIGN WITH FREDDIE MAC, BEYOND HOUSING/NHS, ST. LOUIS COALITION TO PROMOTE REPUTABLE LENDING

Don't Borrow Trouble^SM Metro St. Louis To Help More Than 50,000 Families Borrow Safely

St. Louis, MO – U.S. Representative William Lacy Clay today joined Freddie Mac, Beyond Housing/Neighborhood Housing Services and the St. Louis Coalition to Promote Reputable Lending to launch Don't Borrow Trouble Metro St. Louis. The award winning campaign is designed to help residents in the five-county St. Louis metro area avoid predatory lending practices and access practical financial advice and legal referrals through a new hotline. The Don't Borrow Trouble hotline is 866-299-2899.

"This award winning program will help thousands of St. Louis area residents avoid the unscrupulous practices of predatory lenders," said Congressman William Lacy Clay. "By educating more consumers on how to walk the safest path toward homeownership, Freddie Mac and its partners are helping make dreams come true."

The Don't Borrow Trouble Metro St. Louis campaign seeks to alert at least 50,000 families, especially minorities and low- and moderate-income residents about the dangers of predatory lending, such as exorbitant interest rates, excessive fees, or deceitful lending practices. Local housing officials say that such practices trigger thousands of mortgage delinquencies every year in the St. Louis metro area, especially among senior citizens and minority residents. Don't Borrow Trouble has been launched in 33 communities over the past three years, helping tens of thousands of residents nationwide avoid similar schemes.

Starting today, consumers can call the Don't Borrow Trouble Metro St. Louis hotline for free confidential advice on homeownership and lending-related questions. The new campaign will also provide area families with housing counseling and loss mitigation, financial education, referrals to legal counsel and reputable lenders.

"All across the country Don't Borrow Trouble is playing a critical role protecting the integrity of the American Dream of homeownership," said Tricia McClung, Vice President of Affordable Lending at Freddie Mac. "Don't Borrow Trouble Metro St. Louis is a tested campaign that gets results and we are delighted to join with the Coalition and make it work for St. Louis area families on both sides of the Mississippi."

The Don't Borrow Trouble Metro St. Louis campaign is the latest Freddie Mac effort to expand responsible homeownership in the St. Louis area. In the past five years, Freddie Mac has invested more than $19 billion in mortgages, making affordable homeownership possible for an estimated 178,000 St. Louis-area families.

Beyond Housing/NHS is the lead organization for the Don't Borrow Trouble Metro St. Louis campaign and plans to use television, radio, billboard advertising, and grassroots consumer education programs to warn residents about predatory lending in the five-county area. In addition, the campaign will provide instruction to consumers on how to avoid predatory loans. The campaign will provide a curriculum and instructors to churches, neighborhood groups, and other civic organizations across the St. Louis region.

"Don't Borrow Trouble Metro St. Louis is an innovative, bi-state initiative to remedy the problems of predatory lending through education and direct assistance to individual homeowners. Housing counselors, lending institutions, governmental organizations, legal service providers, and others are working together to ensure that families can sustain the dream of homeownership," said Chris Krehmeyer, Executive Director of Beyond Housing/ Neighborhood Housing Services.

Don't Borrow Trouble Metro St. Louis is offering interim financing through a new loan rescue fund to help predatory lending victims refinance their loans. The assistance is available to borrowers and can reduce the outstanding balance of their predatory loans as a result of successful intervention by campaign partners. To qualify victims must also agree to rebuild their credit and attend workshops and individualized credit counseling sessions sponsored by Gateway to Financial Fitness, a collaborative personal financial education effort in the St. Louis region.

Community Praise for Don't Borrow Trouble Metro St. Louis

The St. Louis Coalition to Promote Reputable Lending says Don't Borrow Trouble Metro St. Louis will play an important role in protecting consumers' credit and financial well being, as well as reducing foreclosures and bankruptcies in the region. The St. Louis Coalition to Promote Reputable Lending is a regional coalition of 44 companies and community-based organizations united in a common cause to combat the effects of predatory lending by providing community outreach, education, legal services and loan products to vulnerable consumers of mortgage loans within the St. Louis region through a partnership of private, public and non-profit organizations.

Pioneered in Boston by Mayor Thomas M. Menino and the Massachusetts Community & Banking Council, Don't Borrow Trouble is being expanded nationally by Freddie Mac. The campaign has received an award for excellence by the U.S. Conference of Mayors. Freddie Mac has helped more than 30 communities across the nation launch local Don't Borrow Trouble campaigns.

In addition to Don't Borrow Trouble, Freddie Mac has also taken several actions to help protect borrowers from predatory lending practices. Freddie Mac was the first major mortgage investor to ban the purchase of mortgages with mandatory arbitration clauses that prohibit a borrower's right to sue, as well as bans on prepayment penalties in excess of three years and single-premium credit insurance policies. Freddie Mac also requires subprime lenders to accurately and fully report monthly borrower credit files to credit repositories so families can benefit from their good payment histories.

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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