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Welcome to the Don't Borrow Trouble® Alaska Site
We've all seen the aggressive marketing campaigns for refinance and home equity loans. They may seem tempting but they may not be the best financing alternative — they could even risk a family's financial health, a home's equity and the stability of a neighborhood. Knowledge is protection — learning about refinancing and the mortgage process puts the power to protect both home and family in the homeowner's hands.
Don't Borrow Trouble is the first comprehensive consumer awareness campaign of its kind, combining public education and counseling services to help homeowners avoid lending practices that strip away their home's equity. Don't Borrow Trouble was pioneered in Boston by Mayor Thomas M. Menino and the Massachusetts Community & Banking Council (MCBC). Freddie Mac has expanded the campaign to more than 40 communities nationwide.
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A Reliable Source of Information
Don't Borrow Trouble Alaska uses brochures, mailings, posters, public service announcements, transit ads and television commercials to inform the public and answer questions from potential borrowers — and to provide assistance to consumers if they've already taken out a loan.
What is predatory lending?
Predatory lending includes home loan scams where a lender or contractor uses deception or fraud to take unfair advantage of a borrower's lack of understanding about loan terms, combined with excessive fees and very high interest rates, without regard to the borrower's ability to repay the loan.
- Home loan offers over the phone, in the mail or in-person at your front door
- A contractor who says he can arrange financing for your home repair
- Pressure to sign loan documents immediately
- Pressure to sign loan documents with blanks in them
- You are not told the interest rate and the fees are not explained
- Interest rates that are far above current market rates
- Fees charged up-front without lowering the interest rate
- Costs and fees above normal
- Repayment schedules set up so that the monthly payment fails to pay off accrued interest and actually increases the original amount you borrowed
- Balloon payments--balance due on the mortgage must be paid at the end of the loan, usually 15 years. The balloon payment will be a huge sum of money, probably beyond your ability to pay. This may force you to borrow more money to pay back the loan
- Loans more than 100% "loan-to-value" may lock you into additional debt
- Credit life or credit accident and health insurance included as a condition of the loan. It increases the amount you owe.
- Loan contracts requiring mandatory, binding arbitration instead of the court system--lenders feel this forum will be more favorable to them and less favorable to the consumer
- Calls and letters asking you to refinance when you already did so in the last year or two
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