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