‘Don’t Borrow Trouble’ in Philly

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Anti-predatory lending campaign launched by Mayor John F. Street, Freddie Mac, city-wide coalition. Consumers can call ‘Don’t Borrow Trouble.’
‘Don’t Borrow Trouble’ in Philly

RISMEDIA, July 1 — Philadelphia Mayor John F. Street joined officials from Freddie Mac and a citywide coalition of businesses and community groups to launch Don’t Borrow Trouble, a new assault on unscrupulous lending practices.

Beginning June 28, families living in Philadelphia can call the Don’t Borrow Trouble hotline at 215-523-9520 for expert advice on predatory lending practices through a referral network of non-profit organizations.

“Predatory lending is wrong, and it must be stopped,” Street says. “We cannot reverse decades of neighborhood decline as predatory lending practices force Philadelphians from their homes and add to our urban blight problems.”

By addressing a cause of residential vacancy and abandonment, Don’t Borrow Trouble is an important component of Mayor Street’s Neighborhood Transformation Initiative, a five-year, $295 million effort to eliminate blight and rebuild Philadelphia’s neighborhoods.

“By working together, we can help more families succeed as homeowners and put a painful thorn in the side of the predatory lending community. Don’t Borrow Trouble is a campaign that gets results,” says Dwight Robinson, Freddie Mac’s senior vice president of corporate relations. “And thanks to Mayor Street and our local partners, we now have the opportunity to make it work for Philadelphia’s families.”

Don’t Borrow Trouble combines advertising and consumer education to alert families to predatory lending practices, such as exorbitant interest rates, excessive fees, or deceitful lending practices. Home owners who believe they have been the victims of these practices can call the hotline, which is administered by Philadelphia Legal Assistance. Depending on the seriousness of the homeowner’s situation, the intake personnel will refer callers to legal and/or housing counseling assistance.

The Don’t Borrow Trouble campaign builds upon the City of Philadelphia’s efforts to create a comprehensive approach to eliminating predatory lending. Over the past year, the City has spent more than $500,000 to provide basic and advanced predatory lending training to more than 60 housing counselors, to fund anti-predatory lending programs at 14 housing counseling agencies, and to finance lawyers at Community Legal Services who are dedicated to predatory lending cases.

In the fall, as part of the Neighborhood Transformation Initiative, the City will provide Philadelphia homeowners with an expanded array of home improvement loan and grant products that will allow them to avoid predatory loans in the first place. These products will also be marketed as part of the Don’t Borrow Trouble campaign.

“In fighting predatory lending, my Administration is committed to forging a broad coalition involving the federal and state governments as well as the private sector and community-based organizations,” Street says. “We will ensure our actions are comprehensive and include public education, loan counseling, and expanded access to legitimate forms of credit.”

The Don’t Borrow Trouble campaign is the latest Freddie Mac effort to expand affordable homeownership opportunities in the Philadelphia area. In the past five years, Freddie Mac has invested more than $17.9 billion in mortgages, making affordable homeownership possible for more than 152,750 Philadelphia area families.

Other agencies and organizations joining the Don’t Borrow Trouble campaign include Community Legal Services, Philadelphia Legal Assistance, The Reinvestment Fund, the Homeownership Counseling Association of Delaware Valley, Greater Philadelphia Urban Affairs Coalition, Philadelphia Corporation for the Aging, and the 16 City-supported housing counseling agencies that provide predatory lending assistance.

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 is also launching Don’t Borrow Trouble initiatives in a total of 23 markets, including Chicago, Los Angeles, New Orleans, and Washington, D.C.

In addition to Don’t Borrow Trouble, Freddie Mac has also taken several actions to help protect borrowers from predatory-lending practices. These actions include a ban on the purchase of mortgages with single-premium credit insurance policies and requiring subprime lenders to accurately and fully report monthly borrower credit files to credit repositories so families can benefit from their good payment histories.

For more information on the City of Philadelphia’s Neighborhood Transformation Initiative, visit www.phila.gov/mayor/jfs/mayorsnti/index.html