LOS ANGELES : Fund OKd to Aid Victims of Equity Fraud Scams
The Los Angeles City Council on Tuesday unanimously approved establishment of a $250,000 loan fund to aid homeowners threatened with the loss of their homes because of equity fraud scams.
Loans expected to average $5,000 will be made to low-income homeowners who unwittingly placed title to their property in jeopardy to obtain credit. Councilman Mark Ridley-Thomas proposed the program, which will use federal funds for the loans and be administered by three minority-owned financial institutions--Broadway Federal Savings Bank, Family Savings and Founders National Bank.
Ridley-Thomas said disreputable lenders have victimized many of his constituents who are in financial stress. The borrowers accept loans at exorbitant rates, not realizing that that they can lose their homes if they default.
The revolving loan fund, called the Home Equity Fraud Intervention Program, was created by representatives of the Legal Aid Foundation, the Los Angeles Housing Authority and Communities for Accountable Reinvestment.
Recipients will have two years to repay the loans.
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