Deceptive ads at bottom of sub-prime mortgage crisis
Kevin G. Hall | McClatchy Newspapers
last updated: August 30, 2007 04:05:44 PM
WASHINGTON — Patricia Clemons had a serious heart condition and she was living on a $1,094-a-month disability check when she answered a letter from a Florida mortgage broker in 2004. It promised what sounded like easy money and cash-back refinancing of her small home in St. Petersburg.
Financial planners warn against taking home loans whose monthly payments exceed 40 percent of income. Yet Clemons, 62, later learned that she'd signed up for a new loan whose costs exceeded 62 percent of her fixed income. To her horror, the loan from Advanced Funding didn't even have an escrow account to include taxes and insurance in her monthly payment.
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