Most mortgage lenders and brokers have their customers' best interests
in mind but there are some who may try to take advantage of consumers
by using "abusive" or "predatory" lending practices.
Homeowners can best protect themselves with knowledge. By becoming more
informed as consumers, homeowners can better safeguard themselves and
ensure they get the best mortgage for which they are qualified.
The Don't Borrow Trouble® campaign
arms homeowners with the information they need to protect their homes.
What is Predatory Lending?
Although predatory lending is not defined by federal law and individual
states define abusive lending differently, these practices usually involve
stripping equity away from a homeowner. Predatory or abusive lending practices
can include:
Repeatedly refinancing a loan within a short period of time and charging
high points and fees with each refinance.
"Packing" a loan with single premium credit insurance products,
such as credit life insurance, and not adequately disclosing the inclusion,
cost or any additional fees associated with the insurance.
Charging excessive rates and fees to a borrower who qualifies for
lower rates and/or fees offered by the lender.
