Predatory Lending

What is Predatory Lending


  • Sales tactics that are aggressive, deceptive, abusive, and unfair with the specific intent to mislead homeowners
  • One of the main ways that people build wealth in the United States is through home ownership
  • Predatory Lenders deny new homeowners the opportunity to build equity and strip equity from long time homeowners
  • Predatory Lending practices target African American, elderly and people with low to moderate incomes

Predatory Lending Practices


  • Lenders rush a borrower claiming that "this is your only chance to get a loan"
  • Prepayment penalties that include monthly payments and refinancing out of a loan
  • Adjustable-Rate Loans' interest rates can significantly increase along with the monthly payments
  • Lenders who allow homeowners to refinance multiple times in order to charge more fees
  • Advertisements that say "Bad Credit Doesn't Matter"
  • Lenders rush a borrower claiming that "this is your only chance to get a loan"
  • Prepayment penalties for early monthly payments and early refinancing out of a loan
  • Predatory Lenders steer qualified borrowers from fixed rate loans to adjustable rate loans
  • At closing, the cost of the loan or loan terms are more expensive than originally negotiated
  • Asset-Based Lending - making unaffordable loans based on a borrower's assets instead of what they can afford.

Avoid Predatory Lending


  • Know and fix your credit. Request your free credit report annually from each credit agency
  • Consult with a HUD certified nonprofit credit counselors
  • Shop around., don't take the first loan offered to you
  • Never sign a blank document for a lender who promises to fill it in later
  • Don't be talked into lying or inflating your income on a loan application

Prestamos Predatorios Folleto (PDF)

Perstamos Predatorios No Quede Atrapado!

Predatory Lending Brochure (PDF)

Text: Predatory Lending, Don't get Trapped