``Don't Borrow Trouble'' Warns Homeowners of Subprime Lending Practices; City of Chelsea Launches Aggressive Community-Wide Effort.

Business Editors

CHELSEA, Mass.--(BUSINESS WIRE)--Dec. 2, 2002

Chelsea City Manager Jay Ash kicked off that city's "Don't Borrow Trouble" campaign today with the announcement of a community effort to warn local homeowners about the risks of some refinance and equity loans.

"The prospect of a refinance loan providing quick money can often be tempting for a homeowner burdened by credit card debt," Ash said. "The message of "Don't Borrow Trouble" is simple: If any lender tells you he can solve all your financial problems with a refinance loan, beware. Ask for advice and assistance before you sign anything."

"Don't Borrow Trouble" is a public awareness program developed by the Massachusetts Community & Banking Council (MCBC) in response to recent aggressive marketing efforts by subprime lenders urging homeowners to use refinance and home equity loans to lower monthly payments and to consolidate credit card bills. While such programs may meet some homeowners' needs, many homeowners do not understand the costs or the risks involved. For homeowners unable to pay these new loans, the result is too often bankruptcy and/or foreclosure. In December 2001, MCBC published a new report showing significant increase in subprime refinance lending in Massachusetts, particularly in cities with high minority and low- and moderate-income populations. In 2000, subprime lenders provided 21.8% of all refinance loans in the state, up from 12.1% in 1999. In 2000, 32.1% of the refinance loans in Chelsea were provided by subprime lenders, up from 25.9% in 1999. Chelsea has the fifth highest rate of subprime lending in the state.

Over the next several weeks, the City Manager said that banks, other local businesses, community organizations and the City will display "Don't Borrow Trouble" posters, distribute English and Spanish-language brochures, promote the campaign through newspaper and newsletter advertisements and hold consumer education classes on financial issues. Local campaign partners include Broadway National Bank, Chelsea Chamber of Commerce, Chelsea Human Services Collaborative, Chelsea-Provident Co-operative Bank, Chelsea Restoration Corporation, Chelsea Senior Center, Citiznes Bank, Metropolitan Credit Union and Sovereign Bank.

The City will include "Don't Borrow Trouble" brochures in the next water bill sent to local homeowners and will display "Don't Borrow Trouble" posters in all municipal buildings and in the public library. Public service announcements will be played on Chelsea Community Cable. All campaign materials are being provided by MCBC. The Chelsea campaign is being coordinated by the City's Department of Planning & Development.

Thomas J. Hollister, president and chief executive officer of Citizens Bank and chairman of MCBC applauded the City's initiative. "The partnership of the City of Chelsea, local banks, other local businesses and community-based organizations demonstrates a strong effort to protect Chelsea's homeowners and neighborhoods."

About the "Don't Borrow Trouble" Campaign

"Don't Borrow Trouble" was launched in Boston in 1999 and has been cited as a national model. In 2000, Freddie Mac expanded the campaign to 12 cities nationwide. The Massachusetts Bankers Association, the Federal Reserve Bank of Boston and Freddie Mac have provided support for the Massachusetts program. As part of the campaign, the Massachusetts Division of Banks is staffing a toll-free number (800 495-2265) to offer information and assistance to homeowners with questions about refinancing or foreclosure prevention. Rattle Advertising and Marketing, Somerville, working in conjunction with MCBC bankers, community representatives and public officials, developed the "Don't Borrow Trouble" campaign posters, brochures and public service announcements.

About the Massachusetts Community & Banking Council

MCBC was established in 1990 as a groundbreaking, collaborative effort between community and bank representatives to encourage community investment in low- and moderate-income and minority neighborhoods. This pioneering organization began at a time of conflict between banks and community groups. Today, MCBC strives to promote a better understanding of the credit and financial needs in those neighborhoods and to provide information, assistance and guidance to banks and community groups in addressing those needs. Additional information on MCBC is available by calling Kathleen Tullberg, Manager of MCBC at 617 244-0271.