OFFICE OF CONSUMER AFFAIRS UNVEILS “BORROW SMART” CAMPAIGN

 

The Ohio Department of Commerce’s Office of Consumer Affairs unveiled its “borrow smart” campaign today.

 

The message encourages Ohioans to be aware of abusive lending practices and to “Borrow Smart” by only signing mortgage loan documents whose terms they agree with, understand, and can confidently repay.      

The Office of Consumer Affairs was created in May by Ohio legislators in an effort to reduce the growing number of consumers falling victim to abusive lending practices.  The office is working to educate Ohioans on how to protect themselves in the mortgage lending process, to receive complaints from those who have been victimized, and to act as a referral service to organizations that can assist the borrower.  When lending laws are violated, the office can initiate enforcement action and refer criminal cases for prosecution. 

As part of the “Borrow Smart” campaign, the office is announcing the establishment of a toll-free Consumer Hotline to receive complaints from those who have been victimized by abusive lending practices and to act as a referral service to organizations that can assist the borrower.   The telephone number for the toll-free Consumer Hotline is 1-866-278-0003. 

The Office of Consumer Affairs has also created two new brochures to assist Ohio borrowers.  They are titled:  “Predatory Lending:  Tricks of the Trade and How to Recognize Them” and “Don’t Become a Victim:  A Guide to Predatory Lending.”  The brochures can be obtained through the Department of Commerce’s web site at www.com.state.oh.us or by calling the Consumer Hotline and leaving a request.  The web site also provides links to useful information from other organizations.    

To avoid being victimized in the lending process, Superintendent of Financial Institutions F. Scott O’Donnell said it is vital for borrrowers to understand the amount that they are borrowing and to assess their ability to repay the loan in addition to other debts that they may have.  The borrower should also fully understand:

 

·        how much is being borrowed

·        the annual percentage rate being charged which includes interest and other finance charges

·        whether the loan has a variable rate or other terms that may cause the monthly payment to increase

·        how much the monthly payments will be including taxes and insurance

·        any points (a point is 1% of the loan amount) being charged

·        all fees associated with the loan

·        the amount of any prepayment penalty and its terms

·        if there is a balloon payment to be made at the end of the loan

·        whether the loan terms fit one’s needs and are in line with one’s credit history

 

“I strongly encourage potential borrowers to consider hiring an attorney to review all loan documents before they are signed.  It is a small price to pay in comparison to the headaches that can follow if you fall victim to an unscrupulous lender,” Superintendent O’Donnell said.  “If you are uncomfortable with any of the terms at the loan closing when refinancing your mortgage, you are under no legal or moral obligation to sign them.  You can feel free to walk away.”  

 

#          #          #