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Financial Counseling Story: Beating Predatory Lending Practices
CommunitySeptember 7, 2023
How Rashawn Thomas worked with GLCU HUD-Certified Housing Counselors to avoid losing his home.
As temperatures plummeted to below-zero and a winter storm moved into Chicago, Rashawn Thomas was preparing to celebrate Christmas. He’d be celebrating in his home, which had not been a certainty until December 21, 2022.
On that date, Rashawn shared with his housing counselor, Wilane Boone, that he’d be receiving $60,000 in mortgage assistance that would enable him to avoid losing his home.
“I am so overjoyed and over-the-moon grateful! I don’t know how to thank you,” Rashawn wrote. “I am so very happy that my house has been saved. This is the best Christmas of my life!”
Facing Ballooning Payments and Bankruptcy
A few years prior, Rashawn had purchased the home with his life savings and later took out a Home Equity Line of Credit (HELOC) with his bank, where he was making on-time biweekly payments. When his bank merged with another financial institution that was unable to accommodate Rashawn’s payment schedule, his new loan was modified to include a balloon payment of $84,000 – a sum due within 6 months.
Unfortunately, Rashawn did not receive the proper disclosures detailing the total costs of the modification and was pressured to sign off on the modified loan without truly understanding the terms.
When the balloon payment came due, he fell behind, and filed for Chapter 13 bankruptcy under the guidance of several attorneys.
Advocating for Affordability
Rashawn was introduced to Wilane Boone, a HUD-Certified Housing Counselor at Great Lakes Credit Union, by employees at the Illinois Homeowner Assistance Fund (ILHAF) after he failed to qualify for mortgage assistance.
“I made an appointment to meet with someone in person, and I’m so thankful it was Wilane,” Rashawn said. “I had been dealing with four so-called lawyers who claimed to be professionals in their fields, [and] all four attorneys failed to see the predatory nature and errors of the loan.”
“Instead, they forced me into bankruptcy to try and save my home,” Rashawn added.
Not Wilane. Upon review of Rashawn’s case, Wilane uncovered that the bank did not provide Rashawn with the proper disclosures. Additionally, since the amount due to the bank equaled the total cost of the loan, Rashawn did not qualify for the State’s Homeowner Assistance Fund.
Going Above and Beyond
Wilane spoke to Rashawn’s bank and advocated that they provide Rashawn a reinstatement figure representative of the debt owed before the balloon was due, which would allow Rashawn to qualify for the mortgage assistance fund and pay off his bank.
After Rashawn filed a complaint with the Consumer Financial Protection Bureau, the bank agreed to the resolution, and Wilane worked with the State Housing Authority to ensure Rashawn’s eligibility for ILHAF.
“When I met with Wilane, she was able to find the errors in the loan and identify it as predatory within 45 minutes,” recalled Rashawn. “She could have just ‘done her job,’ helped me to apply to ILHAF, and sent me out the door. Instead, she went above and beyond. She truly advocated for me and helped me navigate a new and complicated process. For that, I will be forever grateful!”
Rashawn’s foreclosure and bankruptcy are now dismissed. He has an affordable mortgage payment and is continuing to work with his counselor, Wilane, to improve his credit.
If you, or someone you know is in need of free financial counseling assistance, do not hesitate to visit us at https://www.glcu.org/education-and-housing-counseling/ and schedule a free screening.