Thomas and Geneva Chapman (Gary Landers photo) | ZOOM |

Rev. Thomas Chapman and his wife, Geneva, learned how treacherous frequent refinancings with high-interest, high-fee loans can be.

The African-American couple nearly lost the Lincoln Heights home they had paid off after 36 years. In need of cash for doctor bills and home repairs, they accepted a telephone solicitor's offer of a $20,000 loan. The Chapmans refinanced that loan three times over 21/2 years, each time accepting a loan with higher monthly payments.

In the process, the couple refinanced a $12,000 loan that most homeowners would jump at - a 1 percent loan from a Hamilton County community development program for elderly, low-income residents.

Their final refinancing was in July 1999. Commonwealth Financial Services of Symmes Township wrote the couple a $47,600 loan with a 10 percent interest rate. The Chapmans got $2,200 to pay bills - but their monthly payment went up $65 to $412, even though they say they were promised that it wouldn't exceed $340.

In addition, the couple paid nearly $3,000 in fees to Commonwealth. The loan also contained a provision for a balloon payment - which the Chapmans say they were never told about - requiring them to pay a lump sum of $39,123 after 15 years.

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As the weight of the new payments mounted, the Chapmans feared they'd lose their house. They sued the lenders of all three refinancings, claiming they were targeted and misled by loan officers and mortgage brokers.

In 2001, the Chapmans settled with Commonwealth Financial and Equicredit Corp. of Ohio, which initiated the first two refinancings. They got to keep their home with more favorable loan terms.

Gary Tucker, who manages Commonwealth's Cincinnati office, points out that the Chapmans received cash at each of the closings. He won't discuss the case further.

Jacksonville, Fla.-based Equicredit was purchased by NationsCredit in 1999. Two years later, parent company Bank of America shut down NationsCredit for being unprofitable.

Foreclosures are not uncommon in the Chapmans' predominantly black suburb north of Cincinnati. There was one foreclosure for every four owner-occupied homes in Lincoln Heights from 1999 through 2002.