Learning How to Borrow Wisely

Learning how to borrow wisely Cara Baruzzi, Register Staff 03/27/2007 Email to a friendPrinter-friendly Borrow Wise attendees Mara Lavitt/Register (Buy Register photos)

NEW HAVEN — At a time when subprime mortgage lenders are making headlines because of their financial troubles, community leaders Monday introduced a program to educate home buyers about the potential pitfalls of borrowing. The program, called Borrow Wise, is geared toward low-income, minority and elderly residents, who, according to organizers, are the most common targets of deceptive or predatory lending practices. Borrow Wise was launched in Bridgeport in 2004 by the state treasurer’s office and Bank of America, and is now available in 12 cities statewide.

In Greater New Haven, the program is supported and publicized by Empower New Haven, Neighborhood Housing Services of New Haven and Consumer Credit Counseling Services of New England. They will provide program literature to residents upon request, and present information to community groups if asked. Advertisement "Knowledge and understanding is so vital to our future," said Carol Heller, director of financial education for state Treasurer Denise Nappier’s office. Borrow Wise aims to "prevent poor, unwise borrowers from making decisions that have serious repercussions later."

Home buyers who lack financial education are easy targets for predatory lenders who may pressure them into mortgages that don’t fit their needs or that they don’t understand, or loans that have exorbitant fees attached, said Thomas Ficklin, chief information officer at Empower New Haven. Attracted by "the allure of having a quick fix," borrowers sometimes sign mortgages without realizing the long-term ramifications, he said. Borrow Wise teaches home buyers about legitimate, and illegal, mortgage practices and options. Organizers described the program to about 40 community leaders at City Hall Monday, hoping they would take the information back to their respective congregations, community groups, neighborhoods and friends. Education is increasingly important in light of recent troubles among subprime lenders, which specialize in selling loans to borrowers with poor credit, said James Paley, executive director of Neighborhood Housing Services of New Haven. Many subprime lenders are defaulting on loans — leading to foreclosures — and halting lending amid a market downturn. "We’re trying to present some information, heighten awareness," Paley said. -------------------------------------------------------------------------------- Cara Baruzzi can be reached at cbaruzzi@nhregister.com or 789-5748.

Back to News