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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 to repay.

• 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 borrower.

• 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 and products.

• Utilize pushy and pressuring sales tactics to promote home improvements and refinance loans at inflated interest rates.