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2001 Public/Private Partnership Awards MAYOR THOMAS M. MENINO, CITY OF BOSTON OUTSTANDING ACHIEVEMENT AWARD FREDDIE MAC Freddie Mac and the City of Boston
are pleased to nominate Don’t Borrow
Trouble as an example of how the efforts of public/private partnerships can
substantially improve the quality of life in American Cities. As efforts of mayors to increase
homeownership rates in America’s cities become more and more successful,
abusive and predatory lending practices perpetrated by unscrupulous lenders
threaten to undermine those achievements.
Homeowners are constantly being bombarded by aggressive marketing
campaigns for various refinance, home equity and home improvement products,
which may over the long run jeopardize not only homeowners’ financial health,
but also the stability of neighborhoods. Launched in Boston in December 1999 by
Mayor Thomas Menino, Don’t Borrow Trouble
creates educated homeowners who seek assistance and advice, understand their
financial options, and avoid mortgage pitfalls. The program is currently being replicated in 12 additional sites
throughout the nation. Don’t
Borrow Trouble is a two-pronged program which
combines an extensive public education campaign with comprehensive counseling
services to help homeowners avoid scams and resolve any financial difficulties
they may be experiencing in an informed manner. Messages in the advertising campaign combine a warning about
scams along with an instruction to call a toll free telephone number (the
Boston Home Center in Boston).
Materials include placards in buses traveling through neighborhoods
considered at risk; brochures distributed through retail centers, banks and
real estate offices; brochures sent to all the city’s homeowners; PSAs run on
local TV stations; and billboards at transit stops. A person who calls the toll-free
telephone number is connected to a counselor who has been trained to identify
and assist in preventing or resolving predatory lending issues. Depending on the particular problem a caller
faces, he is referred to one or more forms of assistance: a credit counseling
agency for those overburdened with debt; housing counseling for those looking
to purchase or refinance a home; home improvement assistance for those with
urgent home repair needs; foreclosure prevention services for those facing
imminent foreclosure; or legal assistance for those requiring the advice or
assistance of an attorney. Since December 1999, the Boston Home
Center has responded to over 400 Don’t
Borrow Trouble calls. Of the
assistance provided, 33% answered general inquiries about predatory lending
practices, 42% provided answers to specific questions about loan terms, 8%
helped callers who were behind in their mortgage payments to resolve their
problems without further referral, 9% referred callers to foreclosure
prevention counseling and 8% referred homeowners to City of Boston home repair
programs. A number of callers who were
facing foreclosure were able to refinance their mortgages at market rate
through the efforts of the Don’t Borrow
Trouble counselors. Public/private partnership has been
critical to the success of Don’t Borrow
Trouble. Originally developing
separate initiatives, the City of Boston and the Massachusetts Community &
Banking Council (MCBC) merged their efforts and secured the pro bono services
of a marketing firm, Devine & Pearson, to create the advertising campaign. Funding from MCBC, Freddie Mac, the Fannie
Mac Foundation, the Massachusetts Bankers Association, the Massachusetts
Mortgage Bankers Association and the Massachusetts Mortgage Association,
combined with a substantial commitment of operating funds by the City of
Boston, made the launch of the Boston campaign possible. In addition, the city funds services
including the Boston Home Center and extensive foreclosure prevention
counseling through ESAC (Ecumenical Social Action Committee) and HOME
(Homeownership Options for Massachusetts Elders). With the cooperation and assistance
of the City of Boston and MCBC, Freddie Mac has teamed up with the mayors and
community groups of an additional 12 cities to establish Don’t Borrow Trouble campaigns in Atlanta, Baltimore, Buffalo, Chicago,
Cleveland, Las Vegas, Los Angeles, New Orleans, Oakland, Raleigh-Durham
(Eastern North Carolina), Syracuse and Washington, DC. For each of the 12 sites, Freddie Mac is
providing seed funding, the assistance of a marketing consultant, and a media
package of materials to be adapted to the specific needs of each locality. A national web site – dontborrowtrouble – will provide a link into referral information
for each participating city. Freddie
Mac is also funding on-site training to be provided by the National Consumer
Law Center to prepare members of the local referral network to respond to
calls. Local officials are taking the
lead in creating local coalitions to collaborate on the campaign, assemble the
referral network, raise additional funds and manage the day to day
implementation of the program. Don’t
Borrow Trouble is the first comprehensive consumer
awareness/foreclosure prevention campaign of its kind, bringing together a
compelling ad campaign with consumer education, counseling and foreclosure
prevention services to address the problems caused by predatory lending. This innovative and creative approach
developed in the City of Boston is already being replicated in 12 additional
urban areas with the potential of expanding even further. The willingness of each of the partners to
respond creatively to a critical issue and work collaboratively toward a
solution serves as a model for public/private partnerships in other American
cities. |