Speaker raises red flag on predatory lending tactics

By Ryan Haggerty

The Daily Northwestern

Mattie Amaker opened Saturday’s 9 a.m. meeting about real-estate financial scams with a message for her audience — wake up.

Amaker, the housing chairwoman of the Evanston/North Shore Branch of the National Association for the Advancement of Colored People, told the crowd of about 100 people at Evanston’s Fleetwood-Jourdain Community Center, 1655 Foster St., that many suburban residents mistakenly believe they are insulated from the dangers of predatory lenders.

“I live in the suburbs and this does not happen to me,” said Amaker, summing up the traditional views of suburban homeowners. “It does happen to you. It’s not just poor people.”

The NAACP sponsored Saturday’s meeting, “Avoiding the Credit Trap: Predatory Lending,” to alert community members to the warning signs of predatory lending and to teach them how to avoid disastrous financial situations. Predatory lending is a term used to describe lenders who take advantage of residents with lower income and bad credit by issuing unusually high-cost loans. Lured by the availability of immediate cash, the victims often ignore the long-term costs of the loans.

Evanston Mayor Lorraine H. Morton said at the meeting that education is the key to avoiding the traps of predatory lenders.

“We’ve got to educate our children not to get into debt,” Morton said. “We all have to be wiser about how we are sucked in.”

Residents performed four skits — all based on true stories — that were designed to show the tricks of predatory lenders, making the forum a more interactive experience.

Betty Payne, a former Evanston township supervisor and retired vice president for the mortgage division of First National Bank of Chicago, moderated the skits. She encouraged audience members to raise a red sheet of paper whenever they heard an actor fall for the predatory lender’s scheme.

The red sheets shot skyward when an elderly homeowner in the first skit said she had agreed to sell her house to a friend’s son, even though the son could pay only $100,000 of the $165,000 price tag. The contract also did not specify when or how she would receive the balance of the payment.

The audience pointed out the homeowner’s mistake after the skit, and Payne commented on the lessons that could be learned.

“Friends are predators, also,” Payne said. “You can’t always go by the fact that you watched someone grow up.”

During the second skit the red sheets were joined by moans and laughs from the audience when a distraught victim of a predatory lender said, “My boyfriend said he was going to help me.”

Evanston resident Corrine Scott said the skits made a complex problem easier to grasp.

“The skits made it more interesting and easier for people to understand what was going on,” Scott said. “Everybody was able to interact with each other.”

After the skits Payne emphasized that homeowners should not be rushed into signing any legal documents when shopping for loans.

“Let’s just be aware and not make decisions quickly,” Payne said. “Think about it. There’s nothing wrong with saying, ‘I don’t know.'”

Payne also stressed the importance of intimately knowing the laws governing loans and legal contracts.

“Before you sign any kind of documents, you should read them,” Payne said. “Legal documents are difficult to understand. Sometimes I don’t think the attorneys understand them.”

Evanston resident and NAACP member Louis Weathers said he was pleased with the community discussion of a potentially disastrous issue. But he said the true victims of predatory lending are those who didn’t attend the forum.

“Anything that’s dealing with financial issues in my community is definitely worthwhile,” Weathers said. “The people that are really affected aren’t here.”