Hot line helps Tucsonans avoid predatory lenders
November 4, 2006 - Tucson, Arizona
Considering taking out a payday loan or refinancing a mortgage through a company that advertised in the mail? Call (520) 792-3087 first.
That's the number of the "Don't Borrow Trouble" hot line, a new Pima County service that aims to steer Tucsonans away from predatory lenders and assist those who have already become involved with such lenders.
We believe the service is a good use of resources that will prevent Tucsonans from digging themselves into a financial hole or, in some cases, help them climb out of one.
The hot line is staffed during normal business hours Monday through Friday, but callers can leave their names and numbers during off hours and weekends.
Christina Colchado, a project coordinator for Don't Borrow Trouble, said the hot line has been busy in its first week-and-a-half of operation, averaging six to 10 calls a day.
Traffic should pick up when public-service announcements start appearing on television, radio, buses and bus stops. Up to now, the county has used only pamphlets and word of mouth to publicize the program.
"I think it's already starting to make a difference. I look forward to reaching a lot more people," said Pima County Supervisor Richard ElÍas, who helped create the program.
The calls the hot line has received are indicative of the need in the community for sound financial advice amid a plethora of predatory lending schemes, ElÍas said.
Don't Borrow Trouble has a $67,000 budget for its first year, ElÍas said, with funding from the county, the city of Tucson, Freddie Mac (Federal Home Loan and Mortgage Corporation), the United Way and the Pima County Industrial Development Authority, among others.
ElÍas said several leading mortgage companies may someday help fund the program because "it's in their interest to get the bad guys out of the business."
Don't Borrow Trouble is an education and referral service. People who call the hot line are directed to a host of nonprofit organizations that are able to advise families on how to avoid or resolve financial difficulties. The nonprofits can send would-be borrowers to financial institutions that offer loans with reasonable interest rates instead of the tricky, high-interest deals they would get from predatory lenders.
Colchado, who works the hot line, said consumers she talks with are often confused about loan terms or simply don't realize the trouble they can get into by taking out a payday loan or refinancing their mortgage with an unknown lender.
"People tell me often that the loan terms change, the fees change. The loan they get offered is not the loan they end up with," Colchado said. "Unfortunately, we have had people call about home foreclosures. . . . People don't understand changing interest rates, balloon payments, things like that.
"They call us after they've realized they did something wrong."
As Tucsonans become aware of Don't Borrow Trouble, we hope they will call the hot line before they call the predatory lenders.
Tucson Councilwoman Karin Uhlich, a backer of the program, said, "It costs too much to be poor."
Don't Borrow Trouble should help members of our community keep more of their hard-earned dollars.
Arizona Daily Star, Editorial Opinion
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