Frequently Asked questions - Basic Banking for Massachusetts

Q. Why was the campaign developed?
A. Homeowners are bombarded by aggressive mail, phone, television and even door-to-door solicitations for various refinance and home equity loan products t

o lower monthly payments, finance home improvements or consolidate credit card bills. Some of these products may not be the homeowners’ best alternative and may jeopardize not only the their families’ financial health but also the stability of neighborhoods. The campaign was developed to help educate homeowners about the potential costs and risks of these loans and to offer them information about the options that may be available or to provide assistance if they have already taken out a loan.

Q. Is this a problem in our community?
A. In Massachusetts, subprime refinance lending increased 657% between 1994 and 1999. While the number of refinance loans decreased between 1999 and 2000, the loan share by subprime lenders increased substantially. In 2000, subprime lenders provided 21.8% of all refinance loans in the state, up from 12.1% in 1999. Similar patterns exist for inidividual cities and towns. Across the state, loans by subprime lenders make up a disproportionately large share of refinance loans to black, Latino and lower-income borrowers and to neighborhoods with low incomes and high percentages of minority residents. While not all subprime loans are predatory, the existence of high levels of subprime lending can indicate neighborhoods and borrowers that are likely to be targeted by predatory lenders.

Q. What campaign materials are available?
A. MCBC will make bus posters, television public service announcements, newspaper advertisements and English and Spanish-language brochures available to local communities for distribution. Radio public service announcements are in development.

All campaign materials include a toll-free number (800 495-2265) to offer information and assistance to homeowners with questions about refinancing or foreclosure prevention. Calls to the toll-free number are answered by trained staff at the Massachusetts Division of Banks who can provide information, assistance and/or referrals to local community-based counseling agencies.

Q. How can I participate in the “Don’t Borrow Trouble” campaign?
A. Municpalities, bankers and community organizations can all help to get the word out to homeowners. Local outreach efforts can include:

Mailing the brochure with property tax bills or with a letter from the mayor or other community leader
Distributing the brochures and posters through local retail centers, banks, real estate offices, community centers and municipal offices
Placing print ads in community publications and newsletters
Distributing brochures at civic association, church, senior center and community group meetings or through door-to-door leafletting
Placing public service announcements on television stations, including cable stations
Providing or sponsoring consumer education programs on bank products and services, financial management, savings and investment and/or credit

Q. What organizations are currently supporting “Don’t Borrow Trouble”?
A. Supporters of the “Don’t Borrow Trouble” campaign include:

Citizens Bank of Massachusetts (Greater Boston)
City of Boston
City of Chelsea
City of Everett
City of Fall River
City of Holyoke
City of Lowell
City of New Bedford
City of Springfield
City of Taunton
Eastern Bank (Greater Boston)
Fannie Mae Foundation (Boston program)
Federal Reserve Bank of Boston
Fleet National Bank (Western Massachusetts)
Freddie Mac
Massachusetts Bankers Association
Massachusetts Community & Banking Council
Massachusetts Division of Banks
Massachusetts Mortgage Association
Massachusetts Mortgage Bankers Association (Boston program)
Mellon New England
Merrimack Valley Housing Partnership
North Central Massachusetts CRA Coalition
North Shore HOME Consortium
Rattle Advertising & Marketing, LLC
Sovereign Bank New England (Central Massachusetts)