Predatory lending has been a hot topic in the news, among government officials, consumer advocacy groups, and among members of the credit and mortgage industry.
Most of the attention on predatory lending has occurred as a result of lenders employing unscrupulous lending practices like charging excessive points and fees at the beginning of a mortgage. Consumers who fall prey to such predatory lending practices are often in lower income, elderly, or minority communities. Often, persons who are financially vulnerable with limited options due to a poor credit history, or who have a large amount of equity in their home or own their home outright, are the target of lenders using predatory lending practices. The unfortunate and common end result of predatory mortgage lending is the loss of one’s home and one’s financial worth.
Be an Informed Consumer
Although the mortgage loan and auto loan industries have received the most attention in regard to predatory lending, there are several types of abusive lending practices and scams that may strip equity away from a homeowner or place a consumer in financial hardship. The rest of the slides contained in this module will review each of the primary scams, highlight certain business practices of which to be aware, and provide you with helpful information you may use to avoid borrower pitfalls.
It is important to note that high interest rates or fees do not always indicate predatory lending. “High-risk” borrowers (persons with poor credit) will pay more in interest and fees.
Most of the attention on predatory lending has occurred as a result of lenders employing unscrupulous lending practices like charging excessive points and fees at the beginning of a mortgage. Consumers who fall prey to such predatory lending practices are often in lower income, elderly, or minority communities. Often, persons who are financially vulnerable with limited options due to a poor credit history, or who have a large amount of equity in their home or own their home outright, are the target of lenders using predatory lending practices. The unfortunate and common end result of predatory mortgage lending is the loss of one’s home and one’s financial worth.
Be an Informed Consumer
Although the mortgage loan and auto loan industries have received the most attention in regard to predatory lending, there are several types of abusive lending practices and scams that may strip equity away from a homeowner or place a consumer in financial hardship. The rest of the slides contained in this module will review each of the primary scams, highlight certain business practices of which to be aware, and provide you with helpful information you may use to avoid borrower pitfalls.
It is important to note that high interest rates or fees do not always indicate predatory lending. “High-risk” borrowers (persons with poor credit) will pay more in interest and fees.
