Black Homeowner News
Signs Of Predatory Lending
By Roy Primm
is the act of applying abusive and unfair loan terms on
desperate borrowers. Predatory lending is used on African American
and non-english speaking borrowers, the elderly and low income whites
in most cases.
The result of
predatory lending practices in minority neighborhoods has been
responsible for thousands of foreclosures each year. It further dampens
already fragile and unstable communities in many urban areas of America.
Every year many uninformed, misinformed and naive home buyers and
homeowners become victims of predatory lending. Predatory lending is
the act of persuading or tricking borrowers to agree to extremely
risky and punishing loan terms.
Predatory lending companies usually target racial minorities, the
elderly and the working poor. But there are victims being reported in
all racial categories, ages and income groups.
12 Guaranteed Tips To
Avoid Being A Victim Of Predatory Lending:
1. Don't let
anyone convince you to borrow more than you know you can afford.
2. Never sign a blank contract or a contract that has blanks. Place the
initials N/A (Non-Applicable) in all blanks.
3. Read the contract including the fine print, before signing.
4. Don't allow anyone to rush you into signing anything until you fully
understand what you're required to do. Plus what could happen if you
don't do it.
5. Don't allow anyone to convince you to lie about your income or
6. Question all suspicious fees. When in doubt ... ask.
7. Beware of any loans with steep balloon payments, interest only loans
or excessive penalties.
8. Beware of companies who high pressure sale home improvements or
repairs and charge excessive finance charges and other fees.
9. Be cautious of any agent, lender or company that rushes you to sign
loan papers before you've had all your questions answered.
10. Be weary of paying fees above one percent of your loan to your
lender or broker (excluding discount points). These are also called
loan origination fees, document prep or simply lenders fees.
11. Beware of credit insurance (almost never reccomended by most
financial advisors). This is a lenders highest source of profits.
12. Never sign your property over to anyone, including a potential
lender as temporary fix to prevent foreclosure. Many seniors and
desperate borrowers have lost homes with this tactic and made many con
Do your part to fight Predatory Lending Practices, follow these
principles and report all predatory lending to http://www.hud.gov/offices/hsg/sfh/res/resrefer.cfm