About eight in 10 Americans over age 65 own their home free of any mortgage, according to an AARP survey. This represents a golden opportunity for predators who see high rates of home ownership as an opportunity to make generous profits at the expense of unwary consumers who lack comparative shopping skills demanded by today's aggressive marketing environment. A disproportionate number of victims are older people, particularly older women living alone. The need to finance home repair projects or pay off credit card debt often provides easy access to the homeowner's equity.
Foreclosure is often the end result.
Concerned about protection for its members and other consumers, AARP has made the fight to curb predatory mortgage lending one of its strategic priorities. As the initiative develops, AARP will create a variety of resources to support state organizations choosing to combat these practices. Predatory mortgage lending typically takes place in what is called the subprime market, where financial institutions extend high-priced loans to customers with impaired credit. The business is a legitimate service as long as overly aggressive techniques are kept out of the transaction. AARP's Predatory Mortgage Lending Initiative seeks to encourage protective legislation, vigorous law enforcement and the development of better consumer skills so people will compare prices, ask for references, and choose lenders carefully.