Consumer Credit Counseling Service of Los Angeles Awarded $100,000 Federal Grant by HUD to Combat Predatory Lending Practices.

Business, Real Estate & Lifestyle Editors

LOS ANGELES--(BUSINESS WIRE)--Sept. 27, 2000

While delivering a keynote speech to a conference of community and faith-based organizations in Los Angeles on Monday (Sept. 25), Department of Housing and Urban Development (HUD) Secretary Andrew Cuomo announced the award of a $100,000 grant to Consumer Credit Counseling Service of Los Angeles (CCCS-LA).

HUD has been a longtime supporter of CCCS-LA. However, this is the first grant of this kind.

"We are incredibly honored and pleased," said Felix Harris, manager of the Housing Department at CCCS-LA. "The grant will assist us in increasing public awareness about predatory lending, providing educational housing counseling on predatory lending practices and mitigating losses when buyers have been victimized.

"We will also use the funds to help build partnerships among mortgage lenders, brokers and Realtors to conduct public education and outreach aimed at preventing predatory lending in low-income communities," he added.

"Predatory lending," an issue that has been brought to the forefront by media attention, usually refers to mortgage brokers and lenders who strip homeowner equity through illegal or unethical practices.

Predatory lending affects homeowners seeking to refinance or secure home equity loans. The vast majority qualify for "subprime" loans -- loans available to consumers with past credit problems who may not meet the relatively high standards that accompany "prime" loans.

Because they are not monitored by federal regulators as prime lenders are, subprime lenders have more latitude in their methods. Although all subprime loans include less favorable terms than prime loans, in predatory lending the fees, penalties and insurance charges are raised even higher.

In response to the rapidly growing problem of numerous area residents being taken advantage of by lenders employing predatory lending practices, CCCS-LA's Housing Department had developed and offered a free workshop on the topic prior to the announcement of the grant, and this program can now be expanded.

Harris explained that one of the problems with predatory lenders is that they often aggressively target lower-income and minority communities -- especially elderly homeowners -- and these people can be difficult to reach with preventive education. Anyone with a weak credit history and a lack of education about how the loan process works, however, is at risk.

CCCS-LA's workshop, "Finance Your Future Wisely," will help participants learn how to determine the loan amount they can afford, compare financing options and avoid predatory lenders.

In addition, workshop presenters will cover how to avoid unnecessary financing costs, the difference between types of loans, when it is appropriate to refinance, and the definition of credit life insurance and when purchasing it is really necessary.

The next workshop will be held from 9 a.m. to noon on Saturday, Oct. 21, at CCCS-LA's headquarters, 500 Citadel Drive, Suite 300, in Commerce. Parking and admission are free. Reservations are required. Call 323/869-5158 for further information on the workshop or to reserve a space.

HUD, founded in 1965, is the federal agency responsible for national policy and programs that address America's housing needs, improve and develop the nation's communities and enforce fair housing laws. HUD's business is helping create a decent home and suitable living environment for all Americans, and the agency has given America's cities a strong national voice at the Cabinet level.

HUD works to help the nation's communities meet their development needs, spur economic growth in distressed neighborhoods, provide housing assistance for the poor, help rehabilitate and develop moderate- and low-cost housing, and enforce the nation's fair housing laws.

A member of the National Foundation for Credit Counseling (NFCC), CCCS-LA was the only CCCS and NFCC member nationwide to be awarded a grant to aid in the predatory-lending crisis.

Established in 1966, Consumer Credit Counseling Service of Los Angeles is a nonprofit organization dedicated to helping members of the public learn how to prevent and solve financial difficulties. The group offers professional programs including consumer credit education, confidential individual counseling and the implementation of debt-reduction plans.

To make an appointment for a free, confidential debt counseling session in person or by phone, call 800/750-2227.

Recognized as a leader in housing counseling, CCCS-LA is the largest HUD-approved counseling agency in Los Angeles. While working closely with Fannie Mae, Freddie Mac and many Los Angeles community housing organizations and lenders, the Housing Department offers prepurchase counseling and first-time-homebuyer education.

CCCS-LA's housing counselors are well known in the mortgage lending community and can often help individuals avoid default and foreclosure. For the senior-citizen community, CCCS-LA also is an approved reverse-mortgage counseling agency. For more information on services provided by the Housing Department at CCCS-LA, visit the organization on the Web at http://www.cccsla.org/housing.htm.