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Freddie Mac to Help Warn of Lending Traps

August 11, 2000|INDRANEEL SUR | TIMES STAFF WRITER

Public service campaigns warning potential home buyers and other consumers about predatory lending traps will get underway in Los Angeles and 11 other cities over the next year with funding from Freddie Mac, the mortgage giant said Thursday.

Freddie Mac, or Federal Home Loan Mortgage Corp., is chartered by the federal government but owned by shareholders. It has drawn fire from consumer advocates in recent months for its own investments in the lucrative sub-prime market.

Freddie Mac owns $10 billion in sub-prime mortgages, although it has said it does not buy loans that exploit families with poor credit ratings.

Los Angeles will receive about $25,000 from the company, said Sally Richman, manager of policy and planning at the city's housing department.

City officials have not decided what form the public service announcements will take, although billboards and a toll-free information line on home equity issues are among the possibilities, she said.

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