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ACORN Housing Saves Family from Predatory Lender
ACORN Housing Corporation and Minnesota ACORN have saved Lee Yang, Ger Xiong, and their ten children from losing their home to Household Finance

Vang and Xiong refinanced their mortgage last summer with Household Finance and were given a loan with such abusive terms that by the end of the year they were in danger of foreclosure. Household increased their interest rate from 8 percent to 13.8 percent, and their monthly payments from $589, including taxes and insurance, to $1,092, not including taxes and insurance.

As a result of ACORN Housing Corporation's mortgage counseling services and Minnesota ACORN's community pressure, Household has agreed to rewrite the loan, bringing the interest rate back down to 8 percent. Household has also agreed to drop from the loan $7,000 in fees and $24,000 deriving from special no-interest loans that came due for Vang and Xiong when they refinanced.

Vang and Xiong's first contact with Household occurred when they received a check for $5,000 in the mail as part of a loan solicitation. Accepting that offer landed them in the grip of a lending company that did not hesitate to take advantage of their limited knowledge of English. Vang and Xiong have ten children. Vang works in a machine shop making $8 per hour.

When the couple went to the downtown Household office to ask if the $5,000 check was for real, they were told that, yes, they could cash the check and get the money. They were also told that Household could refinance their mortgage and consolidate their bills. Household promised them a lower interest rate - a promise that proved false. They ended up with an extremely expensive loan with a much higher interest rate - a loan that included a prepayment penalty of $5,000, making it difficult to get out of.

"This was an unconscionable act," said Alton Bennett, a Minnesota ACORN Board member. "It is clear that Household took advantage of the couple's limited English skills and deliberately gave them a loan which will be impossible for them to repay. Household's only intent in making this loan was to strip them of all their equity and gain possession of the property, leaving Mr. Yang, his wife, and ten children homeless at a time when the Twin Cities is facing an extreme affordable housing crisis."

AHC Files Complaints
MN ACORN Housing filed complaints with the State Attorney General and the U.S. Commerce Department.

AHC pointed out that Household had violated the following provisions of Chapter 58 of the Minnesota statutes:

• 58.12(1)(b)(2)(iv) "engaged in a fraudulent, coercive, deceptive, or dishonest act or practice,"
  
• 58.12(1)(b)(2)(v) "engaged in an act or practice . . . that demonstrates untrustworthiness, financial irresponsibility, or incompetence,"
  
• 58.13(1)(9) "make or cause to be made, directly or indirectly, any false, deceptive, or misleading statement or representation in connection with a residential loan transaction,"
  
• 58.13(1)(13) "make or assist in making any residential mortgage loan with the intent that the loan will not be repaid and that the residential mortgage originator will obtain title to the property through foreclosure."

"We could not afford the payments to Household Finance," said Ger Xiong. "We thank God for the help of ACORN Housing and pray that they can help other families."

Household is an habitual offender.
Unfortunately, what Household has done to Vang and Xiong is not an isolated incident. Throughout the country, ACORN Housing and ACORN members have found that Household engages in predatory practices, including: