Los Angeles County has agreed to a $12-million settlement to resolve allegations that its home improvement lending program wrecked the finances of many borrowers and left them vulnerable to foreclosure. The settlement, granted preliminary approval Monday by an L.A.
programs, including L.A. County's, have been dogged by allegations that consumers — particularly elderly and non-English-speaking homeowners — didn't understand what they were getting into and couldn't afford their loans, which, if unpaid, could lead to foreclosure. Initially, lenders handed out loans based on the amount of equity a homeowner had in their property and didn't consider the borrower's income to determine if they could repay the loan.
loans caused very large debt burdens. In addition, those with big debt burdens who at the time of origination were 65 and older or had limited English proficiency will receive even more money. 'For those people who particularly were kind of victimized ... I think it will be very significant,' said Michael Maddigan, an attorney with Hogan Lovells. Though L.A. County no longer offers a