Salisbury, Maryland, Neighborhood Housing Services assembled a training to educate homeowners on predatory-lending practices. The goal of the program is to generate awareness of selected “bad-debt” scenarios favored by predatory lenders. The training also emphasizes financial literacy and explains lending terms and procedures.

Salisbury NHS opened in 1994 to increase home ownership in its community. Many products and services are offered by SNHS to create safe and affordable housing in three target neighborhoods. Additionally, SNHS strives to educate customers and the community on issues and topics relevant to home ownership and neighborhood stabilization.
 
Predatory lending is an issue in most communities throughout the United States. It is a threat, especially, to lower-income households who have accumulated equity in their homes, but have minimal cash at hand. SNHS customers often fit this category, and thus are potential targets for predatory lenders. To educate the community, SNHS created a seminar, “Predatory Lenders and Other Sharks in the Financial Waters.”

1.  Training Outline
The “Predatory Lenders…” training is a two-hour, interactive seminar provided free to the community. SNHS shows participants how to become debt free, demonstrates solicitation traps, and offers tips and suggestions on finding respectable lenders. The training includes a half-hour video of selected news reports that profile predatory-lending victims and give tips on how to avoid becoming victimized. The video is available through NeighborWorks Amercia.
 
A large portion of the SNHS training involves role-playing and group activities to teach participants how to avoid becoming “prey.” SNHS reviews words and phrases to look for, and demonstrates suspicious phone and advertising solicitations so participants understand how and when to say “no.” Sample solicitation letters are shown, and SNHS presents a breakdown of predatory-lending strategies such as debt consolidation, refinancing and rent-to-own schemes. SNHS explains how predatory lenders entice customers by promising short-term financial resources — usually at the cost of long-term savings. SNHS emphasizes the benefits of paying cash for items, rather than using credit.
 
At the end of the seminar, SNHS presents resources for additional information, and offers tips and suggestions on debt management. SNHS recommends contacting the Better Business Bureau, NHSs, or regulatory agencies when shopping for credit, to distinguish whether a lender is suitable and trustworthy.

2.  Additional Training Resources
SNHS will include a software program in the training called “Power Pay.” The software illustrates how to use a payment strategy that is guaranteed to eliminate debt. SNHS will incorporate “Power Pay” into the training and teach participants how to profit from it.

3.  Program Costs
The main cost of the program is staff time, which ranges from three to 10 hours a week. NeighborWorks Amercia provided technical assistance during program startup, and SNHS is responsible for the cost of training materials, binders and copies.

4.  Course Trainers
SNHS will recruit trainers from companies that are interested in the issue of predatory lending and want to protect people from such situations. SNHS plans to ask banks and mortgage companies, SNHS board members, interns from Salisbury State University and people from the community to become trainers. Volunteer trainers will attend a “Train-the-Trainer” course to learn how to facilitate the class. The first “Train-the-Trainer” course will take place in late February 2000, and the first “Predatory Lenders…” seminar will take place in April or May.

5.  Partnership with the Library
Salisbury NHS is developing a partnership with the county public library to assist with the program. The library will buy books on predatory lending and create a doorway exhibit with information on predatory lending. The library will also provide a training room for seminars, with no charge to SNHS.

6.  Program Versatility
The program is designed as a guided training, but consumers can easily use the materials to educate themselves. There is a binder for trainers and a binder for participants that are easy to use and understand. Materials can be loaned out to customers from SNHS and will also be available at the library.

• Engage potential partners in the community who can benefit from the program as much as the NHS. Appeal to partners such as churches, civic organizations and schools, who are stakeholders in the community and will gain from homeowners having this knowledge.
   
• Identify good trainers. The trainers need to be proactive and interactive, as well as knowledgeable on the topic. The success of any training relies largely on the quality and personality of the trainer.

Agency interview with: Cheryl Minton