WHAT IS PREDATORY LENDING, ALSO KNOWN AS ABUSIVE LOAN PRACTICES?
Predatory lending is another term for loan fraud committed by mortgage lenders, home appraisers or real estate professionals on consumers who are trying to buy a home, obtain re-financing or make improvements on their home. A bad loan obtained from a predatory lender may cause homeowners to lose their chance to buy a desired home, lose the equity in their current homes or force them to sell their homes when they are unable to make loan payments. Predatory lenders can cause consumers to lose their homes and property investments by practices such as: • Having borrowers make false statements about their income in order to get a loan; • Purposely making higher loans than borrowers can afford to make payments on; • Charging high interest rates based on factors other than credit history such as a borrower’s race or national origin; • Pressuring borrowers to assume higher risk loans that may have balloon payments, pay only on the loan’s interest or have steep penalties for pre-payments; • Per
