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feasibility of creating a maintenance and replacement reserve account for <br />affordable home buyers assisted with the entitlement and other federal <br />funds to insure that funds are escrowed to help cover the cost of major <br />repairs. Other alternatives being evaluated include the feasibility of <br />creating a mortgage default and foreclosure prevention account for <br />affordable home buyers assisted with federal funds to insure that funds <br />are escrowed to help cover the cost of unexpected income /job loss and to <br />write down interest rates. <br />Impediment: Predatory lending and other industry practices. <br />Issue: Predatory lending is a widespread concern in San Marcos. Several <br />incidents were cited, by person interviewed and those attending the focus <br />group sessions, suggesting unfavorable lending practicess. In some of the <br />minority neighborhoods, lending institutions display an insignificant <br />presence in the community. In other low- income neighborhoods, <br />traditional banking and lending relationships have been relegated to an <br />overabundance of pay -day loan, check - cashing, and title -loan stores due <br />to a lack of traditional lending institutions. Focus Group participants also <br />complained of extremely high interest rates being charged by not only <br />neighborhood predatory lenders, but traditional banks and financial <br />institutions for credit cards, auto loans, and other consumer loans. In <br />some instances, the low- income population may be subject to predatory <br />lending because they have a poor credit rating and limited credit history. <br />Others participating in the Focus Group sessions and interviews provided <br />anecdotal comments that they believed that recent homes built in older <br />neighborhoods and minority concentrated areas are sometimes priced <br />lower than comparable units in other areas based on industry appraisals. <br />Appraisals generally determine value based on comparable units in close <br />proximity to the subject property, Older neighborhoods tend to have <br />e Focus Group Sessions page 56 <br />