Hello, my name is Pam Kennebrew, and I work with the Philadelphia Unemployment Project—a membership organization of low-wage workers and the unemployed that started in 1975. 

My job is to work with people who are having trouble making their mortgage payments.  Sometimes this is because of a job loss or illness.  These days, more often it's because the loan was bad from the beginning.  Many abusive loans come with excessive fees, and behind most excessive fees I see, there's a mortgage broker.

One case I'm working on now involves a mortgage for a 65-year-old retiree named Helen Schiffler. 

When Ms. Schiffler refinanced her mortgage, a mortgage broker persuaded her to borrow more than she wanted to borrow at an interest rate of 12%.  When that rate went up, Ms. Schiffler didn't even know it was an adjustable—she thought it was fixed. 

The fees on Ms. Schiffler's loan amounted to $10,000—more than 10% of the loan amount, with most of the money going to the broker.  The long list of charges included a yield-spread premium, plus some items I had never seen before.  So even before Ms. began struggling with her mortgage payments, she had already lost thousands of dollars in equity. 

My client did not seek this loan out: The broker approached her at a senior citizen center.  He gained her trust and told her she was doing the right thing.  Because he knew much more about mortgages than she did, she believed he was helping her.  Now Ms. Schiffler owes more on the home that it is worth.

Thank you for the opportunity to speak today.  I hope this research will shed light on abusive broker charges and help people who—if they only have a decent loan—could be secure and responsible homeowners.