Wolves in Lenders' Clothing

Early last year, Tony Ellsworth was told he could get a 7.5 percent interest mortgage that he could prepay early if he wanted to, without penalties. By the time the New Sewickley Township (Beaver County) resident read the papers he'd signed in a hasty outdoor closing in the February chill, he realized he'd been duped. The loan from Ameriquest Mortgage was at 10.25 percent, and included prepayment penalties. He tried to cancel it but just got the run-around from the company's loan officers, he told community advocates gathered in City Council Chambers on June 13. Sixteen months later, he is behind on his inflated payments, and the lender has "threatened me with foreclosure, threatened me with garnishment of wages," he said.

Ellsworth contacted the Pittsburgh Community Reinvestment Group, which helped him find lawyer Bruce Fox, who is preparing a class-action suit against Ameriquest. That could be a test run for PCRG, which on June 13 unveiled its campaign against so-called predatory lenders, who dish out high-interest, high-fee, penalty-packed loans to people who may not be able to afford to repay them. Predatory lenders have driven a near-quadrupling of foreclosures in Allegheny County since 1995.

PCRG aims to fight predatory lending primarily through an education campaign, using bus ads and brochures featuring a suit-clad wolf holding a loan application. PCRG program manager Greg Simmons will also take a life-sized wolf poster on the road to any group that will hear him. (Déjà vu is certainly warranted here: A City Paper illustrator used a wolf to illustrate a series of articles on predatory lending beginning in January 2002.) Community groups have pushed the effort, which has received $50,000 from the city. Local banks and other lenders have also contributed, but PCRG would not say how much. PCRG and allied lawyers will help borrowers already in the wolf's grasp to escape their loans, negotiate down their debts or refinance at lower rates.

"We labored about what [the symbol of predatory lending] was going to be," said Aggie Brose, chair of the anti-predatory lending effort. "Was it going to be a shark? A wolf? A bear?" (It should be noted that most of the average bear's diet consists of non-meat foods, and some bears -- like pandas -- are almost totally vegetarian.) Despite the shark's traditional association with unfair loans, they saw the wolf as sufficiently menacing, and more likely to be seen standing outside a home than an aquatic predator. "We want to make sure -- really sure -- that everybody in Allegheny County knows the wolf," said Brose. "Would you really want a wolf to be a part of your life?"

PCRG Predatory Lending Hotline: 866-907-2285.