By Alex Ginsberg
Stop. Shop around. Don’t rush into anything. Ask someone.
Five experts in combating predatory lenders who target senior citizens agreed on that simple advice during a two-hour forum Friday at Queensborough Hall.
“Ask someone,” said Donna Dougherty, senior attorney with Jewish Association of Services for the Aged. “Call the borough president. Call the Department for the Aging. Call Legal Aid or Legal Services or the attorney general or Neighborhood Housing Services. These groups are there and they have no interest — they are a neutral body.”
The event was co-sponsored by Queens Borough President Helen Marshall, the Queensboro Council for Social Welfare and the Queens Interagency Council on the Aging. Panel members agreed that predatory lending was a particular problem in Queens, with its large population of retirees and senior citizens, and especially in lower-income neighborhoods in southeast Queens.
“Queens, which is very often a leader in such wonderful things, is also a leader in this very terrible thing,” said Joan Serrano-Laufer, executive director of QCSW.
Predatory lenders — unscrupulous mortgage brokers who pressure seniors into accepting high interest rates, unfair terms or extreme penalties — rely on uninformed consumers to make their money, panel members said.
Oda Friedheim, an attorney with the Queens Legal Aid Society, said the lenders approach seniors who have missed mortgage payments and convince them they are about to lose their homes. The seniors, who are often isolated and lack the resources to get better information, panic and easily believe that their only choice is to accept the loan being offered.
Another frequent tactic is to approach older homeowners whose houses are obviously in need of repair, with the lenders often working in conjunction with contractors themselves.
The damage can be staggering. Friedheim cited one elderly woman who had gone from owning her home debt-free to being saddled with $160,000 worth of debt and facing foreclosure.
When the time comes to sign papers, predatory lenders frequently whisk the borrower away — often to a bank in the suburbs — where he or she is surrounded by a room full of bank officials, Friedheim said. Many victims are fooled by the fact that a lawyer is present, but the attorney is there to represent the bank’s interests, not the senior’s.
Howard Banker, a representative of the Parodneck Foundation, a non-profit association that helps seniors obtain low-interest loans, said the unscrupulous brokers often bend the truth or lie outright on the senior’s loan application. He cited one instance in which an elderly woman was shocked to see that the application said she earned $800 a week baby-sitting.
Friedheim and others cautioned that even if the senior goes through with a predatory loan, it is not too late to get out of it. Any borrower has the right to nullify the loan during a three-day “cooling-off period” following the closing.
But even after three days, Banker said his organization could help those victimized by predatory lenders.
“We work with legal service providers to look over the papers that the predatory lender provided to see if there may be the basis for a lawsuit or at least a little smacking around of the predatory lender,” he said.
He also described an option called a “reverse mortgage,” which is a loan based on the value of a senior’s home for which no monthly payments are required. Instead, the loan comes due only when the senior dies and value of the estate provides the funds needed to pay off the loan.
“If you’re very low income, it’s a very neat kind of loan to take,” he added.
Another of the afternoon’s speakers, Ken Davies, said his organization, Neighborhood Housing Services, would issue about 300 reverse mortgages this year as well as provide referrals to honest contractors.
Lois Booker-Williams, an attorney and investigator in the Brooklyn office of the state attorney general, said her office had the power to seize assets, revoke licenses, refund consumers and impose fines, penalties and sanctions.
She warned borrowers to be wary of any lender who solicits by telephone or by going door-to-door.
“Imagine working 50, 60 years of your life,” she said. “And finally getting that one big-ticket item, that American dream, to own the home. … Imagine being told, a year later, husband and wife, I’m sorry, you are now on the street.”
Reach reporter Alex Ginsberg by e-mail at Timesledger@aol.com or call 718-229-0300, Ext. 157.
