Predatory lending plaguing city

Three Bloomington organizations teamed up Tuesday night to present a public seminar focusing on avoiding predatory lending.\nPredatory lending is the practice of making high-interest loans in unfair terms without people's knowledge. The lender usually pressures a customer into accepting this loan, according to information presented at the seminar. \nOver the past few years, Lisa Abbott of Bloomington's Housing and Neighborhood Development Department began to notice an increase in the number of her clients taken advantage of by predatory lenders. \nAbbott counsels low- to middle-income people who want to buy or remodel a house and found that many are in debt because of predatory lending.\n"The things I see sometimes are frightening," Abbott said about the hidden costs her clients are forced to pay.\nShe learned that Indiana Legal Services, Inc. and the Bloomington Housing Authority had witnessed the same problems with their clients. Abbott saw a need to educate the community on how to avoid predatory lenders and began to work with these organizations to present a seminar.\nConsumers often do not know they are being taken advantage of by predatory lenders. Many people are forced into debt by a second mortgage, a car loan or a high-interest credit card, Abbott said.\n Sandy Clothier, of the City of Bloomington Housing Authority, said car loans are often long-term loans.\n"(The loans) will continue long after the car is useful anymore," she said. \nClothier works with low-income people who are trying to become self-sufficient. She sees many people victimized by rent-to-own stores, which may charge people up to four or five times the price of a new appliance, she said.\nCollege students are usually most affected by credit-card solicitors, pawn shops and check-cashing stores, Abbott said. Each of these services usually charges consumers more money than they are aware of.\nMarcy Wenzler, an attorney with Indiana Legal Services, Inc., said predatory lenders often target people who do not have as much credit as those in the main market and try to sell loans to people who aren't looking for them by convincing them they need a loan to get out of debt.\nThere are many ways to recognize predatory lenders. They often try to solicit people over the phone, by mail or door-to-door. They pressure consumers to sign or don't give them time to read documents. They guarantee a loan regardless of credit history, and they make people think their offer is the only way to get out of debt.\nPredatory lenders often won't explain the rate or fees of the loan and may change the terms at closing, Wenzler said.\nThe organizers of the seminar offered some tips that are worth remembering. First, read every part of a contract before signing it to make sure there are no hidden costs involved. And, if something sounds too good to be true, it probably is.