African American Homeowner Guide To Predatory Lending

 

Black Homeowner News


Signs Of Predatory Lending
By Roy Primm

Predatory lending 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 expenses.

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 artist richer.

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