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The Don't Borrow Trouble® Anti-Predatory Lending Campaign Comes To Ventura, Calif

Oxnard, CA – At a press conference here today, a coalition of private and public organizations headed by the Real Estate Fraud Advisory Team (R.E.F.A.T.) and Freddie Mac (NYSE: FRE), are kicking off the Don't Borrow Trouble® campaign in Ventura County, Calif. This public education campaign is aimed at preventing predatory lending practices and protecting home ownership in Ventura County.

The coalition urges consumers to call the Don't Borrow Trouble Ventura help line at 211 for calls made from a landline within the 805 area code. For callers using a cell phone, dial 800-339-9597. The hotline is staffed by trained professionals who can offer free assistance to individuals seeking information about purchasing a home, refinancing, consolidating debt, taking out a home-equity loan and mortgage foreclosure prevention. Individuals can also be referred to appropriate legal or financial experts.

Freddie Mac is the principal sponsor of Don't Borrow Trouble's expansion throughout the United States and has brought the campaign to more than 50 locations across the country. The Don't Borrow Trouble campaign also uses brochures, radio and television public service announcements and workshops to educate consumers who are most vulnerable to predatory lending practices, including the elderly, minorities and low- to moderate-income individuals. By combining advertising, face-to-face consumer education and housing counseling, the campaign helps consumers avoid abusive lending practices, such as exorbitant interest rates, excessive fees and pressuring tactics.

In addition to the helpline, a key feature of the Don't Borrow Trouble Ventura County campaign is the availability of consumer educations workshops utilizing Freddie Mac's CreditSmartÒ multilingual financial education curricula. CreditSmart is designed to educate consumers about credit and money management, provide insight into how lenders access credit histories, explain the role of credit in achieving financial goals and foreclosure prevention.

"We welcome Freddie Mac's Don't Borrow Trouble campaign to our community," said Dean Maulhardt, mayor pro tem of the City of Oxnard. "We support this campaign for a very good reason: We have always viewed real estate fraud and predatory lending practices not only as wrong and illegal, but also as obstacles to our efforts of providing needed housing in our community. Removing barriers has been part of our proactive efforts in providing housing opportunities for our residents."

"One of the most effective strategies to combating predatory practices in the real estate industry is to raise public awareness of the risks people face and to arm them with information so they may avoid becoming victimized in their pursuit of home ownership," said District Attorney of Ventura County, Greg Totten. "Through our partnership with Freddie Mac, our Real Estate Fraud Advisory Team will be able to increase our educational outreach efforts within our communities and coordinate the delivery of crucial services to those at risk of losing their homes as a consequence of predatory practices."

"Guarding our local citizens against predatory and abusive lending practices is one of the most important services the County can perform for its citizens," said Supervisor John Flynn. "We do this by supporting Freddie Mac's Don't Borrow Trouble – Ventura County campaign, one of the most effective means of counteracting this terrible wrong perpetrated against honest, hardworking people.

"On behalf of my colleagues on the Board of Supervisors, I congratulate and applaud the Real Estate Fraud Advisory Team in utilizing this program and making great strides in educating the public to be aware, to be informed and to be cautious."

"United Way of Ventura County values its support of our county's 2-1-1 program. The new and exciting ‘Don't Borrow Trouble' program is certain to provide important benefits for residents of our county," said David M. Smith, president and chief executive officer, United Way of Ventura County.

"The Real Estate Fraud Advisory Team views the Don't Borrow Trouble –Ventura County campaign as one more very important tool to help us combat real estate fraud in our county," said Jim Keith, co-chair of R.E.F.A.T. and VCCAR Board member.

"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 Dwight Robinson, senior vice president of Freddie Mac. "Don't Borrow Trouble is a proven method to help stop predatory lending, keep families in their homes, build wealth and strengthen communities. These organizations should be commended for banding together and combining their resources to educate consumers on the perils of predatory lending practices."

Predatory lending practices strip equity away from homeowners by repeatedly refinancing a loan within a short period of time and charging high points and fees with each refinance; packing a loan with single premium credit insurance products like credit life insurance and not adequately disclosing the inclusion, cost or any additional fees associated with the insurance; or charging excessive rates and fees to a borrower who qualifies for lower rates and fees.

Members of the Don't Borrow Trouble Ventura County campaign are: Real Estate Fraud Advisory Team; Cabrillo Economic Development Corporation, City of Oxnard, Consumer Credit Counseling Service, Freddie Mac, United Way of Ventura County, Ventura County District Attorney's Office - R/E Fraud Prosecution Unit, Ventura County Coastal Association of Realtors® (VCCAR), Ventura County Superior Court Self-Help Legal Access Centers, Ventura County Bar Association – Volunteer Lawyers Services Program, and Walk Your Talk Productions.

Don't Borrow Trouble was pioneered in Boston by Mayor Thomas M. Menino and the Massachusetts Community and Banking Council.

Freddie Mac is a stockholder-owned company established by Congress in 1970 to support homeownership and rental housing. Freddie Mac fulfills its mission by purchasing residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than four million renters in America.

Tips for Avoiding Borrowing Pitfalls

Source: Freddie Mac

1. Say NO to "easy money." Borrowers should beware if someone claims "credit problems won't affect the interest rate." Avoid solicitations for loans that sound too good to be true. If it sounds too good to be true, it probably is. If a solicitation is really interesting, get it in writing!
2. Shop around. Borrowers should talk to several lenders to find the best loan for which they qualify. A loan product or lending practice may not seem predatory until compared with a similar loan product offered by other lenders.
3. Understand the loan terms. Borrowers should compare loan terms from different lenders. Understand the best loan terms available in the marketplace and compare the APR (annual percentage rate) of loans from different lenders. The APR takes into account both the interest rate and the points and fees of the loan. A nonprofit housing counselor or a lawyer can review the information with a borrower.
4. Find out about prepayment penalties. Borrowers should know if the loan offered to them has a prepayment penalty. Prepayment penalty should be a choice, not a requirement.
5. Make sure documents are correct. Be cautious of someone who offers to falsify a borrower's income information to qualify for a loan. Borrowers should never falsify information or sign documents that they know to be false.
6. Make sure documents are complete. A borrower should not sign documents that have incorrect dates or blank fields. Be wary of promises that a lender will "fix it later" or "fill it in later."
7. Ask about additional fees. Borrowers should question any items they didn't ask for. Borrowers should also beware if they are told that single premium credit insurance is required get a loan, or that purchasing it will help loan approval. Review every fee and compare different lenders' fees to ensure the most competitive loan terms.
8. Understand the total package. Ask for written estimates that include all points and fees. The situation may not seem abusive until everyone gets to the closing table. If any fees or charges differ from what was previously disclosed, delay the closing until all terms of the loan are clearly understood.
9. Work with credit counselors. A borrower should get all the facts before deciding to combine credit card or other debts into a home loan. Beware of scam credit counseling/ credit consolidation agencies – unfortunately, not all credit counseling agencies are acting in your best interests. Talk to a community-based consumer credit counseling agency or housing counselor before signing the loan documents.
10. Protect home equity. If borrowers are taking equity out of their property, they should take out the minimum amount needed. The equity in a home is a source of wealth, which builds up slowly over time.
11. Get advice first! Talk to a community-based consumer credit counseling agency or housing counselor.

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