There'S No Place Like A Cardboard Box: Predatory Lending And The Community Of St. Albans

There's No Place Like a Cardboard Box: Predatory Lending and the Community of St. Albans

During a February 2004 testimony on Capitol Hill, David G. Wood, Director of Financial Markets and Community Investments for the Committee on Senate Special Aging, defined predatory lending as:

...a range of practices, including charging excessive fees and interest rates, making loans without regard to borrowers' ability to repay, or refinancing loans repeatedly over a short period of time without any economic gain for the borrower." (Wood 1)

Congress decided then that home lending scams substantially affect homeowners across the country. However, there is more of a dilemma only in particular sections of the US. Areas where the majority of homeowners are lower to middle-class African Americans. These areas include several neighborhoods in the five boroughs of New York City, consisting of sections located in Brooklyn and Southeast Queens, which includes the community of St. Albans, Queens.

Predatory lenders prey on those looking to buy a home even though, financially, the buyer is not ready. Most predatory lending schemes come from the offices of "subprime" lenders. Subprime lenders are those who offer loans when traditional banks reject applications with unacceptable credit scores and histories. Unorthodox terms, such as single-premium credit life insurance, phony fees, balloon payments and strict penalties for paying the loan off early (Harney 1), are commonplace when working with subprime lenders. The cost of maintaining a home under these conditions is obviously higher than that of the traditional borrower.

According to the table, even though African-Americans living in St. Albans outnumber those living in Forest Hills, Queens there are more homeowners with fewer costs to pay each month in the neighborhood

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