Sharon has a problem with her memory, but she thinks it was five years ago when she first took out a high-interest loan from a cash-checking business in South Carson City.
It was for $50, then she doubled it.
"Then it was up to $400 by the time I got help," she said. "How it got up to $400, I don't know."
Really, she does. She was paying for her car loan, food, rent and medical insurance. Sharon is what many would consider a credit risk. She's on permanent disability. She had breast cancer twice within a two-year period. She found the first lump herself; a digital mammogram found the second one.
"It couldn't be treated. They had to take both (breasts)."
Sharon has had other medical problems. She lives on a small pension and receives Medicare. Her monthly income is $1,100. She had to go to the check-cashing business monthly to pay the interest in cash. On $400, that was $80 a month.
"I never let it get above $400, but it got me sucked in for two years. For two years, I paid $80 a month."
That $50 loan became a $1,920 loss. She'd always tried to use money wisely, so this gnawed on Sharon, who requested that her last name be withheld.
Sharon learned about the Don't Borrow Trouble campaign and took her problem to Greater Nevada Credit Union, a partner in the program that helps people escape predatory lenders.
The campaign educates and helps victims of predatory lending, which a spokeswoman said includes gouging interest rates and fees that set borrowers up for failure - shackling them to loan companies for years.
Worried consumers are referred to campaign partners and sponsors to review loan documents and possibly intervene. The Northern Nevada Don't Borrow Trouble hotline receives 70 calls a month from consumers who want counseling on their first mortgage, refinancing or home-equity loans, and reverse mortgages.
Housing counselors have intervened before homes are lost to creditors in Northern Nevada, said Thomas Vetica, operations specialist for the Department of Housing and Urban Development.
He knows what to look for in loan documents, such as:
"Loans where it's based primarily on the value of the asset, not on the borrower's ability to pay," Vetica said. "Lenders would structure a loan so people can't make monthly payments. So interest rates are too high. That includes fees and insurance policies that are excessive and not necessary."
The loan is structured in a way that the borrower can't pay it back.
"Then they can foreclose on it, and then they own the house and they can sell the house," he said.
Sharon said her loan counselor is wonderful.
She gave her a loan with a manageable interest rate of 5 percent, with her car title as collateral, to pay off the check-cashing business. Sharon will have the debt paid off in August.
"As a credit union, we believe we're an advocate for public education on borrowing money," said Dean Altus, chief operating officer for Greater Nevada Credit Union. "We know there are some individuals out there who prey on consumers."
Vetica said there is a rescue fund for victims. For information on Don't Borrow Trouble, call 1-800-451-4505.
Sharon lives in a small house in Carson City with her Chihuahua, Foxy. Her daughter and 6-year-old granddaughter live nearby.
"I haven't had good luck," she said. "But I can't say every day is bad. I feel good if I can just get the major things done. I want to join an exercise class. And my insurance will pay for it."
• Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.
Are you taking a risk?
Americans are losing their investments and falling deeper into debt when they fail to recognize the signs of predatory lending. Avoid lenders, appraisers, mortgage brokers and home-improvement contractors who:
• Sell properties for much more than they are worth using false appraisals.
• Encourage borrowers to lie about their income, expenses or available cash for down payments to get a loan.
• Charge high interest rates to borrowers based on their race or nationality, and not on their credit history.
• Charge fees for unnecessary or nonexistent products and services.
• Pressure borrowers to accept higher-risk loans, interest-only payments and steep pre-payment penalties.
• Target vulnerable borrowers to cash-out refinance offers when they know borrowers need cash because of medical, unemployment or debt problems.
• "Strip" homeowners' equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.
• Use high-pressure sales tactics to make the borrower do home improvements then finance them at high interest rates.
- Source: Don't Borrow
Trouble campaign