What are the abusive practices in predatory lending?
Predatory lending is often associated with tricky practices that strip the consumers to helplessness. Predatory lenders target people on basis of their personal characteristics and provide unfair loan terms. They often underwrite loans thereby ignoring the borrower’s inability to manage a mortgage. Given below are 6 most common practices of predatory lenders: Equity stripping: The lender takes away a portion of the borrower’s home equity without providing any value to the owner. Asset Based Lending: Providing finance based on home equity without considering the borrowers’ financial capacity to repay. Mortgage Flipping: Lenders allow refinancing continuously and charge high fees and penalty from the consumer’s home equity. Packing: This involves the lender forcibly charging various service fees, especially purchase of insurance that has not been requested by the consumer. Property Flipping: Speedy resale of property at a price that is higher than market-value using fake assessment. Prac
