"Spikes in property values have made Habitat for Humanity homeowners prime targets for predatory lenders. Some lenders have enticed clients of the Christian housing ministry to borrow against their homes, as the owners build equity quickly due to Habitat's no-interest loans. But the deals almost never pay off for the borrower.
"First-time homeowners don't have a lot of credit," said Cheryl Peterson, mortgage foreclosure prevention counselor at Twin Cities Habitat for Humanity in Minnesota. Some see refinancing as a means of paying off consumer debt. But "it's never as affordable as a Habitat loan," Peterson said. ..."
I try not to be judgmental, but it is difficult, especially when I read something like this.
I have worked on a number of habitat houses and I have a deep respect not only for the Habitat for Humanity organization, but also for the people who are served by Habitat. I just read an article (hat/tip to Presbyweb) about attempts to build Habitat houses in affluent Marin County, California, and the hostility of the well-to-do homeowners who are afraid that their property values will plummet. Even here in Columbia, Missouri there is a "not in my neighborhood" attitude -- and this in areas that, judging from the yard signs during election campaign, tend to see themselves as "progressive".
In this article, the "sharks" use phone calls, home visits, and brochures resembling Habitat literature to entice first-time homeowners into taking on new, high-interest debt.
According to Peterson, the mortgage counselor for the Minneapolis Habitat organization, only about 2% of Habitat mortgages are foreclosed after refinancing, and that Habitat homeowners may, in fact, be more aware of pitfalls due to required classes in personal.