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Loan Program to Help Stifle Home Equity Scam Artists

January 16, 1994|LUCILLE RENWICK | TIMES STAFF WRITER

In an effort to rid South-Central and East Los Angeles of home-equity scam artists and to help homeowners who have fallen prey to them, the City Council has approved a pilot loan program that will go into effect by Jan. 31.

The Home Equity Fraud Intervention Program, a revolving loan fund, was created by representatives of the Legal Aid Foundation, the Los Angeles Housing Authority and Communities for Accountable Reinvestment to allow low-income homeowners to avoid foreclosure and retain their homes while trying to get back on their feet financially.

The fund will have an emergency loan pool of $250,000 from federal Community Development Block Grant funds. Eligible homeowners will receive loans averaging $5,000 at 3% to 5% interest.

The program will be open to all low-income homeowners, especially those living in South-Central and East Los Angeles, where 60% of housing fraud scams occur, according to law enforcement officials and public-interest attorneys.

The loans will be distributed by Broadway Federal Bank, Founders Bank and Family Savings & Loan.

Agencies that assist scam victims will make referrals to the participating banks for the pilot program. The agencies include:

* Bet Tzedek Legal Services, (213) 939-0506;

* South-Central Legal Aid, (213) 971-4102;

* East Los Angeles Legal Aid, (213) 266-6550;

* Legal Aid Foundation of L.A. Homeowners Outreach Center, (213) 732-0153.

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