Ownership Preservation Project

Legal Assistance Foundation of Metro Chicago's Home - 020052

Abstract Number: 020052

August 2002

The Legal Assistance Foundation of Metropolitan Chicago (LAF) created the Home Ownership Preservation Project (HOPP) to protect, educate, and litigate on behalf of low-income individuals against predatory lenders. LAF has concluded that predatory lenders tend to target people who are equity-rich and cash poor and who live in low-income neighborhoods, especially the elderly, since they have little access to reasonable loans and credit. Victims of predatory lending often are in need of cash and fall prey to "subprime" loans due to a lack of financial knowledge. LAFMC indicates that subprime loans account for 15% of home refinancing loans in Chicago and 53% of loans in African-Americans neighborhoods in Chicago.

Typical schemes involve packing loans with unnecessary and excessive fees, charging exorbitant penalties, and charging high interest rates. When the victims are unable to pay, the lenders foreclose on their homes and the victims lose all the equity in their homes. LAFMC's Home Ownership Preservation Project fights these predatory lending practices through the following initiatives:

• LAFMC provides training to community advocates such as senior service providers, non-profit financial counselors, and elder law attorneys on how to identify and avoid predatory lenders
• LAFMC represents and provides legal advice to individual victims of predatory lending
• LAFMC provides training and counseling to homeowners on how to identify and avoid predatory lenders
• LAFMC advises legislators and community groups on how to take action against predatory lenders

In addition to these efforts, in 2000, the LAFMC helped convince HUD to implement a twelve-month moratorium on HUD-insured foreclosures while clients sought new sources of financing. Also, HOPP worked with Chicago banks, the Chicago Department of Housing, Neighborhood Housing Services of Chicago, and Fannie Mae to create two new funds that allows predatory lending victims to receive loans if they can show that a predatory lending practice hurt or destroyed their credit rating. To learn more about the Home Ownership Preservation Project, click on the PDF documents below.

Contact Information:

Daniel P. Lindsey
Supervisory Attorney
Home Ownership Preservation Project
Legal Assistance of Metropolitan Chicago
111 W. Jackson Blvd. 3rd Floor
Chicago, IL 60604-3502
Phone: (312) 341-1070
Fax: (312) 341-1041
dlindsey@lafchicago.org

Additional Information:

• Predatory Lending Training Material ( 1.0mb)
• Foreclosure Prevention Material ( 478k)
• Workshop Outline ( 108k)

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