Successful Long-Term Homeownership Begins with Consumer Education

Successful Long-Term Homeownership Begins with Consumer Education

National Council of La Raza to Offer CreditSmart® Homeownership Preservation Materials.

Phoenix, AZ, November 13, 2007 – Homeownership counseling and education are more important now than ever given the recent rise in mortgage delinquencies and foreclosures. Freddie Mac (NYSE: FRE), one of the nation’s largest investors in residential mortgages, and the National Council of La Raza (NCLR), the nation’s largest Hispanic advocacy organization, are continuing their tradition of working together by educating Latinos in the Phoenix area on all aspects of homeownership, from maintenance to financial management and foreclosure prevention.

This year Freddie Mac (NYSE: FRE) enhanced its CreditSmart® multilingual financial literacy curriculum by adding new material on homeownership preservation, including foreclosure prevention, planning for emergencies, property maintenance and avoiding financial traps. NCLR will offer the CreditSmart workshops in English and Spanish, which will give participants a greater understanding of the responsibilities of caring for their homes, the importance of maintaining their credit, and what to do if they ever have difficulty meeting their financial obligations.

“Many people learn how to manage their finances by trial and error. A home is often a family’s largest investment and source of wealth, so it’s important to not risk losing it through a hit or miss approach to finances, ” said Dwight Robinson, senior vice president of Corporate Relation and Housing Outreach for Freddie Mac. “One way to better prepare our nation’s homeowners for the responsibilities of homeownership is through consumer education. CreditSmart is designed to help consumers build and maintain better credit and understand the steps to successful long-term homeownership.”

“Latinos across the country have worked hard to reach the ultimate symbol of the American Dream – homeownership. Unfortunately, predatory practices have led to record-high foreclosure rates that are draining wealth from Latino communities,” said Janet Murguía, president and CEO, National Council of La Raza. “We are delighted to be partnering with Freddie Mac to help foster best practices in the mortgage industry and we are pleased to support them in their efforts to educate and empower Latinos so that they can keep their homes.”

According to the U.S. Census Bureau Hispanic homeownership rates hit a record high this year of 50 percent, though that is still about 20 percent less than the rate for non-Hispanic whites.

“NCLR is a trusted source of information in the community,” added Robinson. “We are proud to continue our 5-year history of working with NCLR to address the needs of potential and current homeowners.”

For more information about a CreditSmart workshop offered through NCLR, call 202.776.1706.

The following home preservation tips are provided courtesy of Freddie Mac’s CreditSmart curricula.

Costly Business Practices

While check-cashing businesses are legal and found throughout the United States, they are typically used by individuals who don’t have traditional credit, savings or checking accounts. They often charge very high fees for their services. Try these alternatives to check cashing businesses:

  • Cash your check at the bank that issued the check. The bank whose name or logo is on the check. The bank fees may be lower than the check cashers.
  • Try to save up enough money to equal the check cashing fee and use the funds acquired over time to open a checking or savings account where you can deposit or cash your check for little or no fees. Ask local lenders about their special low balance checking and savings programs.

Home Improvement Loan Scam

Home improvement scams come in various forms, including the two most common:

  • The contractor asks for money up front and leaves after completing little or no repair work.
  • The contractor helps you get a loan to refinance repair costs that grow way beyond the original estimate and agreement. The repair costs, plus exorbitant hidden fees and high interest rates become so expensive they’re ultimately unaffordable.

For more consumer tips or information about CreditSmart, visit www.FreddieMac.com/creditsmart.

Recognizing that consumers seek information and assistance from lenders, community-based organizations and other housing professionals, Freddie Mac developed CreditSmart as a tool to support the efforts of organizations that share its goal of creating better-equipped homeowners. CreditSmart, CreditSmart® Español, and CreditSmart® Asian (available in Chinese, Korean, and Vietnamese) were developed with participation from multicultural community-based organizations. Since its inception in 2001, more than a million consumers nationwide have been exposed to the CreditSmart curriculum.

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible more than 50 million times, ensuring financing for one in six homebuyers and more than four million renters.

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