"Habitat" Homeowners The Target Of High Pressure Pitches To Refinance?

In an opinion column, The Grand Rapids Press notes:

• Housing advocates say unscrupulous brokers and lenders are preying on the owners of Habitat homes, bombarding them with offers to refinance out of their original interest-free loans. Local and national Habitat officials should issue special warnings to their clients, who often are cash poor and naive about financial matters. Unfortunately, the combination makes them tempting targets.

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• Habitat agencies in many large cities require homeowners to take out a "silent" second mortgage in addition to their primary Habitat mortgage, often a 20-year loan. The second is forgiven when the first matures, but both must be paid if the house is refinanced or sold early. The second mortgage, which costs the homeowner nothing, is a means to lessen the attractiveness of the home's equity and to keep sleazy lenders at bay. [...] Habitat affiliates in Indianapolis and Columbus, Ohio, say many clients are getting mail solicitations that look to be from Habitat but are not.

For more, see Hustlers home in on easy prey.