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Borrower beware!
More than 1,600 West Virginians have lost their homes in the last two years to
companies that require borrowers to put up their houses to secure loans.
A survey by a Charleston law firm called Mountain State Justice found has
uncovered a number of problems associated with the home equity loans.
Home equity lending companies foreclosed on residents in 54 of the state's 55
counties between July 2001 and June 2003, according to well-known social
activist and attorney Dan Hedges.
Only Gilmer County did not have a foreclosure.
Hedges said home equity companies lend money to customers who agree to put up
their homes as collateral. The out-of-state companies often involve borrowers with
bad credit or low incomes who cannot otherwise borrow money.
Hedges blames the state's high number of low-income homeowners and eroding
state regulations to limit the lending practice.
He believes there are numerous illegal practices involved with the loans.
Hedges is a native of Spencer.
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