The post-Christmas credit-card bill arrives. Then come the solicitations, urging you to get a tax-refund-anticipation loan, or roll all your debts into a big mortgage. The terms initially sound enticing, but the paperwork shoved your way is full of high fees and exorbitant interest rates. Before you know it, your holiday splurge can cost you a lot more than what you paid at the checkout.
Low-income communities are particularly susceptible to unfair "predatory" lending and tax preparation rip-offs, says Maryellen Hayden, head organizer at the Pittsburgh office of the Association of Community Organizations for Reform Now. That's why ACORN opened its new Financial Justice Center in East Liberty on Jan. 3. If those credit-card bills overwhelm you, ACORN offers credit counseling. "We'll have you come into the office, bring all of your bills, all of your paperwork," Hayden says. ACORN will talk about solutions and may even help negotiate with creditors or refinance high-interest debt into a low-interest loan -- for free.
The center also offers free tax preparation, including electronic filing that can get you your refund within weeks. Hayden says that's a response to the "ready refund" companies that proliferate in low-income neighborhoods. "People are charged huge fees, and are given refund-anticipation loans that are literally worthless," she says.
Another focus is stopping mortgage foreclosures, which continue to hover near record highs, with more than 4,100 new foreclosures filed in Allegheny County in 2004. ACORN can often renegotiate or refinance bad loans, Hayden says. The organization pickets the offices of lenders it believes are ripping people off. It's also urging Allegheny County Sheriff Pete DeFazio to refer people who face foreclosure to credit counselors before auctioning off their homes.
Everything at the Financial Justice Center is free, thanks to a $202,700 grant from The Pittsburgh Foundation that should fund the operation for two years. Says Hayden: "Predatory lenders beware, because we are going to increase our activities ten-fold."
ACORN Financial Justice Center: 412-441-6551