ALASKA CAMPAIGN LAUNCHED TO HELP CONSUMERS AVOID PREDATORY LENDING

ANCHORAGE, AK - At an Anchorage Board of Realtors luncheon here today, a coalition of 31 private and public organizations, including the U.S. Department of Housing and Urban Development, AARP Alaska, Anchorage Neighborhood Housing Services, Fairbanks Neighborhood Housing Services and Freddie Mac, launched a major statewide public education campaign aimed at preventing predatory lending practices in Alaska.

Also included in that coalition are the Municipality of Anchorage, the City of Fairbanks, the City of North Pole, and
the Fairbanks North Star Borough (see end of release for a complete list of organizations).

The coalition urges consumers to call the Don't Borrow Trouble-Alaska help line at 1-888-925-2521 that will be
staffed by trained professionals who can offer free assistance to individuals seeking information about purchasing a home, refinancing, consolidating debt, taking out a home-equity loan, and for mortgage foreclosure prevention. Individuals can also be referred to appropriate legal or financial experts.

The Don't Borrow Trouble^© Alaska campaign also uses brochures, a website at
www.muni.org/dontborrowtroublealaska, radio and television public service announcements and workshops
throughout the state to educate consumers who are most vulnerable to predatory lending practices, including the elderly, minorities and low- to moderate-income individuals. By combining advertising and face-to-face consumer education and housing counseling, the campaign helps consumers avoid abusive lending practices, such as
exorbitant interest rates, excessive fees and pressuring tactics.

We hope people will use these resources that we've put in place before they get into financial problems, said Anchorage Mayor Mark Begich. The website, which the Municipality is hosting, is a resource for those who want to find out more about predatory lending practices and how to avoid them.

Predatory lending practices hurt borrowers, certainly, but they also hurt other lenders, and they hurt our
communities, Colleen Bickford, Anchorage Field Office Director for the U.S. Department of Housing and Urban Development, said. For the past six years, HUD has been actively involved in combating predatory lending through regulation, consumer education and enforcement actions against lenders, appraisers, real estate brokers, and
others that have victimized homebuyers. Homeownership is a vital step for families to build assets. We want those families to know as much as possible before beginning the homebuying process, so they can avoid those unprincipled lenders and brokers.

Predatory lending practices attack the heart of our communities. These practices can strip away home equity and trap unwary borrowers in a dismal cycle that ultimately replaces homeownership with foreclosure, said Craig
Nickerson, vice president of Expanding Markets for Freddie Mac. Don't Borrow Trouble is a proven method to help
stop predatory lending and to keep families in their homes, build wealth and strengthen communities. These 31 organizations should be commended for banding together and combining their resources to educate consumers on
the perils of predatory lending practices.

Predatory lending practices strip equity away from homeowners, by repeatedly refinancing a loan within a short
period of time and charging high points and fees with each refinance; packing a loan with single premium credit insurance products like credit life insurance, and not adequately disclosing the inclusion, cost or any additional fees associated with the insurance; or charging excessive rates and fees to a borrower who qualifies for lower rates and fees.

Pioneered in Boston by Mayor Thomas M. Menino and the Massachusetts Community and Banking Council, Freddie
Mac is the principal sponsor of Don't Borrow Trouble's expansion throughout the United States. Freddie Mac has brought the campaign to 40 locations across the country, and has received more than 100,000 inquiries to the Campaign's help line.

Tips For Avoiding Borrowing Pitfalls
Source: Freddie Mac

• Say NO to "easy money." Borrowers should beware if someone claims "credit problems won't affect the interest rate." Avoid solicitations for loans that sound too good to be true. If it sounds too good to be true, it probably is. If a solicitation is really interesting, get it in writing!
• Shop around. Borrowers should talk to several lenders to find the best loan for which they qualify. A loan product or lending practice may not seem predatory until compared with a similar loan product offered by
  other lenders.
• Understand the loan terms. Borrowers should compare loan terms from different lenders. Understand the
  best loan terms available in the marketplace and compare the APR (annual percentage rate) of loans from different lenders. The APR takes into account both the interest rate and the points and fees of the loan. A nonprofit housing counselor or a lawyer can review the information with a borrower
• Find out about prepayment penalties. Borrowers should know if the loan offered to them has a prepayment penalty. Prepayment penalty should be a choice, not a requirement.
• Make sure documents are correct. Be cautious of someone who offers to falsify a borrower's income information to qualify for a loan. Borrowers should never falsify information or sign documents that they know
  to be false.
• Make sure documents are complete. A borrower should not sign documents that have incorrect dates or blank fields. Be wary of promises that a lender will "fix it later" or "fill it in later."
• Ask about additional fees. Borrowers should question any items they didn't ask for. Borrowers should also beware if they are told that single premium credit insurance is required get a loan, or that purchasing it will
  help loan approval. Review every fee and compare different lenders' fees to ensure the most competitive loan terms.
• Understand the total package. Ask for written estimates that include all points and fees. The situation may not seem abusive until everyone gets to the closing table. If any fees or charges differ from what was previously disclosed, delay the closing until all terms of the loan are clearly understood.
• Work with credit counselors. A borrower should get all the facts before deciding to combine credit card or other debts into a home loan. Beware of scam credit counseling/ credit consolidation agencies -
  unfortunately, not all credit counseling agencies are acting in your best interests. Talk to a community based consumer credit counseling agency or housing counselor before signing the loan documents.
• Protect home equity. If borrowers are taking equity out of their property, they should take out the minimum amount needed. The equity in a home is a source of wealth, which builds up slowly over time.
• If you're not sure, don't sign! Get advice first! Talk to a community based consumer credit counseling agency or housing counselor.