Predatory lender teams with Peoria Housing Authority to rip off poor people

Peoria Journal Star reporter Elaine Hopkins reports on how the Peoria Housing Authority helped various low-income Peorians arrange loans so they could buy their own homes. Sounds like a good idea, right? homeownership is better than rental.

The problem is that the PHA stood by -- at the least -- and watched as these buyers were handed forms that called for them to pay adjustable rate mortgages and balloon payments, all against PHA policy. At the worst, PHA employees were in on it.

As a result, these poor people who had trouble making ends meat before are now paying hundreds more per month than they can afford. And the contracts they sign forbid them from refinancing at lower rates without paying huge penalties. And these predatory lenders? A friend of a PHA employee, of course.

The lender says they all signed of their own free will. Victims said they were told by the PHS to sign with this particular lender.

There was a PHA employee who wrote a memo about these shady practices. She was fired.

My two cents: I want to know what U.S. Rep. Ray LaHood is going to do about this. The PHA operates under the auspices of the federal government. LaHood is Peoria's only congressman. It's up to LaHood to step up and do something about the PHA and fix this problem. At the very least he needs to light a fire under the feds ass so they will respond to complaints.

It's one thing to get this all out in the open. But it can't end with some sort of apology and a statement that the people responsible have been disciplined or have quit. These people are in danger of losing their homes and losing their equity. Something HAS to be done to help them. These people were screwed over by the government.

The PHA is the biggest slumloard in Peoria. It's no surprise to me that a slumloard associates with predatory lenders.

Cross posted at Peoria Pundit