| Some of these solicitations may be
read to indicate that the Federal Reserve endorses or supports the
offers they contain. These solicitations appear to be a deceptive
effort to encourage consumers to apply for a mortgage loan
secured by the consumer's home. The Federal Reserve cautions the
public about loan solicitations or other offers from lenders or
mortgage brokers that offer consumers cash grants or equity
disbursements as part of a "CRA Program." No such federal
programs exist and these programs are not required by the CRA.
The Community Reinvestment Act is a
federal law that was enacted in 1977. It encourages depository
institutions to help meet the credit needs of their communities,
including low- and moderate-income neighborhoods, in ways that are
consistent with safe and sound banking operations. The CRA does not
entitle individuals to any grants or loans.
The Federal Reserve is also
advising consumers that it does not endorse or sponsor mortgage
loan programs. Consumers should be very suspicious of conducting
business with lenders or mortgage brokers that make deceptive
claims.
Individuals who are considering
taking out a loan using their house as security are urged to
shop around. Comparing loan programs offered by a variety of
different lenders can help consumers to get a better deal. This
online interagency pamphlet, Looking for the Best Mortgage:
Shop, Compare, Negotiate, contains useful information about
shopping for home loans:
http://www.federalreserve.gov/pubs/mortgage/mortb_1.htm
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