Loan Blogger

Predatory Lending – What you Need to Know

You have probably heard of predatory lending.  Predatory lending is a serious problem and in hard economic times it becomes a serious threat.  Predatory lenders prey on those who are already in financial trouble and help to dig them deeper into debt.

Most often the result of predatory lending is that a person loses their home and ends up in serious debt.  Predatory lending is, in fact, defined by the fact that the homeowner does not benefit at all from the transaction.  In a traditional lending situation the homeowner does benefit.

Predatory lenders often use coercion and abusive practices to get borrowers.  They often target people of lower incomes, the elderly and minorities.  Most states have laws or are in the process of setting laws regarding predatory lending.

The keys to predatory lending are that they charge high fees, include unnecessary products and excessive penalty charges.  Most of the time a regular lender can provide the same services for much lower costs.