Mortgage advice
Keep Clients Out of Lending Trouble

Freddie Mac’s anti-predatory lending Web site offers valuable resources for home buyers.

REVIEWED BY KELLY QUIGLEY

Don’t Borrow Trouble

The hot housing market of the past several years led to many new mortgage products—some of which can hurt a home buyer’s financial health, home equity, and neighborhood stability. The issue has become so critical that Freddie Mac has launched a nationwide campaign to educate the public on risky loans. One byproduct of this campaign is an information-filled Web site that can help you and your customers better understand the various loan products. Or, you can visit the Web site to download or print information to distribute to consumers. These are some of the site’s highlights:

• What Is Predatory Lending? Encourage inquiring customers to read this section of the site, which aims to help buyers safeguard themselves against abusive lending practices and find the most favorable mortgage. Consumers also can access resources on Learning More about abusive lending practices and get tips on avoiding borrowing pitfalls.
  
• CreditSmart. The most effective way to prepare consumers for home ownership is to educate them on the importance of using credit wisely. This online tutorial covers nine important topics, including managing money, understanding credit scores, and steering clear of credit traps. The entire CreditSmart Curriculum is available through the Web site for free. A Spanish-language version also is available.
  
• Prepayment Penalty Mortgages. Prepayment penalties can add up to big trouble for some home owners who think they’re being responsible by paying off a large chunk of their mortgage ahead of the due date. Make sure that your customers don’t unknowingly enter into such an agreement. This page will help them grasp what a prepayment penalty mortgage is and why they should be careful about this type of loan.
  
• Bringing Don't Borrow Trouble to Your Community. Want your city to launch a campaign against predatory lending? Just contact your mayor or other local public official and ask them to submit a written request to Freddie Mac. Get the address and other essential information for sending the letter at this section of the site.
  
  
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