Subprime mortgages essentially vanished in the credit meltdown and housing recession. But predatory lending still persists, so HUD has decided to fight back against such practices by giving home buyers and homeowners the knowledge they need to recognize and sidestep such "deals." Working in partnership with the National Fair Housing Alliance (NFHA), HUD on Monday launched a national media campaign to educate consumers about alternatives to foreclosure, how to avoid predatory loan terms, and how to recognize and report rental discrimination.
“Many families, particularly minorities, have been victims of aggressive and misleading marketing of risky loan products and foreclosure rescue scams,” HUD Secretary Shaun Donovan said, speaking at NFHA’s annual conference in Washington, D.C. “As we implement president Obama’s Making Home Affordable plan to deal with the foreclosure crisis, we need to ensure that families in trouble with their mortgages are not hurt a second time with scams.”
Campaign messages, formulated in partnership with the Ad Council, will target four types of consumers: those in immediate need of refinancing; those in or close to foreclosure; those who are facing eviction or are already in the rental market; and those who are ready to purchase a home.
“Today we are witnessing the devastating effects of the foreclosure crisis in communities across the country--a loss of wealth and housing security, depleted tax bases, reduced social and municipal services, and less funding for schools,” said NFHA president and CEO Shanna L. Smith.
More than half of consumers who received high-cost subprime loans in some recent years could have qualified for a lower-cost prime loan, according to research by the Wall Street Journal and Fannie Mae. Communities of color and low-income borrowers have been disproportionately targeted, campaign organizers pointed out.
The multimedia blitz will include print ads and posters in English, Spanish, and Chinese, as well as broadcast public service announcements in English and Spanish, movie slides, airport displays, and Web banner ads. Content-specific Web sites also have been created with educational information on foreclosure prevention, predatory lending, and rental housing discrimination.
“Many people erroneously believe that, because the subprime market is diminished, predatory lending is a thing of the past,” said Smith. “Nothing could be further from the truth. Predatory practices still occur, and they can happen even in the prime market. While no consumer should be expected to become a lending expert in order to get a fair loan, knowing the right questions to ask will certainly put consumers in a position to get the best loan available to them.”
Jenny Sullivan is senior editor, design, at BUILDER magazine.
Learn more about markets featured in this article: Washington, DC.