We are all aware the stories in the press about seniors losing their homes on account of unfair lending practices. Most reputable banks could not consider bilking their potential customers beyond their nest egg but there are many small, private lenders that will just be too happy on the opportunity to take action. The act of lending Money under conditions unfair to the borrower is known as predatory lending. Lets examine the finer points of predatory mortgage lending.
Predatory mortgage lending has become a major policy issue for finance institutions during the entire nation. Virtually every federal financial services regulatory agency has denounced the practice, and possesses tried to address the situation by pressuring legislators to enact laws that protect consumers from all of these fraudulent practices. Many states have enacted laws to protect their citizens from unfair banking practices, partly due to policy papers issued by the key banking institutions
Predatory mortgage lending is seen as an the subsequent: excessive interest rates or fees, abusive or unnecessary provisions with no profit to the borrower, large prepayment penalties, and underwriting that ignores the borrowers power to repay the borrowed funds involved. Because details and types of conditions of each one financial transaction differ, high aprs alone usually do not constitute predatory lending. To qualify as predatory lending, the transaction must contain three of the above stated conditions.
Many predatory lenders use fraudulent target marketing to identify their potential prospects. These unscrupulous financial institutions have a tendency to pay attention to folks that miss a sound knowledge of finance. Predatory lenders almost exclusively seek out people who have limited education which can be not able to understand the finer details of their finance conditions. In addition they regularly prey on the elderly, since they have limited incomes and significant equity inside their homes.
In the event you or somebody is considering borrowing for any mortgage, please take a moment to coach yourselves regarding the potential pitfalls. Always deal with reputable finance institutions. If you have any concerns in regards to the business practices of an particular lender, you can always try investigating them on the "Better Business Bureau". If you're not comfortable doing business with them, be sure that you usually do not sign anything. Take the time to schedule an appointment friends or family, and continue to do business with companies that they trust and have put their faith in. On this point in time, it pays to be an experienced consumer.
