In the kitchen of Daisy Thompson's modest two-bedroom home in South Dallas, her daughters are cooking meatloaf and cornbread for dinner. Thompson's four grandchildren wriggle in and out of her lap, stretching their blue Kool-Aid-stained tongues and hamming for a laugh. Thompson, a 48-year-old Headstart teacher with a round, friendly face and smooth dark skin, rewards them with a weary, appreciative smile. As her eyes lower to the mortgage-refinancing papers spread out on her living room table, however, the smile fades into an expression of confusion and despair. "I used to think that I would be leaving this home for my family," she says with a sigh. "Now I will just be leaving them a mountain of debt."

It took only a blown engine and a half-hour with the loan officer from Beneficial, a subsidiary of lending giant Household International, to convince Daisy to turn her home from an asset into a burden. In 1998, when Thompson's 4-year-old Hyundai rolled to a stop with a loud knock and a plume of smoke, she was left without any way to get to work. When Thompson realized it would take a few thousand dollars to replace the engine, she called Beneficial, whose flashy brochures had appeared regularly in her mailbox. Filled with smiling customers and bright, bold slogans like "We are there for you," the brochures seemed to provide an answer.

But when the Beneficial loan officer arrived at her house, Thompson found out the loan would come with a steep price. He told her that she didn't qualify for a personal loan, but she would be able to borrow $10,000 by rolling all her debt together and refinancing her home at 18.5 percent interest. Thompson, who at the time had only seven years left on her mortgage, felt as though she had no other choice. "He smiled a lot, looked me in the eyes, and told me that he was here to help me with my financial situation," she recalled. "I needed to get to work. I didn't know what to do. I just signed it." NEXT »

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