Home and Refinance Loans by Predatory Lenders –
Loans to Avoid
As the availability of home loan financing becomes
an American dream come true, predatory lenders lie in
waiting. The complexity of buying a home is a haven
for unethical lenders to prey on homebuyers. While there
are a wealth of legitimate professional mortgage brokers,
appraisers, and real estate agents, ready to offer their
services, a bit of consumer home loan and refinance
loan intelligence goes a long way.
The loss of home property is an epidemic that is spreading
across the nation. Americans from small and large communities
alike are exposed to the growing number of predatory
lenders. Certain predatory professionals pose as home
improvement contractors, appraisers, mortgage brokers.
The following list of case scenarios detail the common
rash of predatory practices:
• Marketing property is real estate sold at a
higher price than its actual value due to a false perception
value based upon unauthentic appraisals.
• Target vulnerable mortgage consumers for cash-out
refinance loans for borrowers who are in need of cash
due to unemployment, debt problems or medical expenditures.
• The encouragement of documenting false loan
information occurs anytime a lender or appraiser recommends
misrepresenting the detail of a loan application in
the way of income, bills, assets, amount of cash available
for a down payment.
• Lending more money than the borrower can afford
• Charging excessive high interest rates to borrowers
based on ethnicity opposed to credit history.
• "Stripping" a home of its equity
by urging the homeowner to make perpetual refinance
loans when the home refinance is not beneficial to the
• Pressurizing a borrowers opt a higher-risk
loans in the way of an interest only payment, balloon
loan, or steep pre-payment penalty.
• Charging fees for frivolous or factitious services
• Utilize pushy and pressuring sales tactics
to promote home improvements and refinance loans at
inflated interest rates.