lending practices a problem for the public as the recession and the home
mortgage crisis gets worse. You can
protect yourself from deceptive
Victims of Deceptive Lending Practices
- Minority Groups – members of minority groups are
a favorite target of unethical lenders, even in instances where the person
could qualify for a loan with better interest rate and terms.
- Low Income and the elderly
- Families in Financial Burdens – deceptive lenders often take
advantage of persons by promising to stop foreclosures or helping pay off bills
If you are a member of any of these groups, you should take
special care in responding to any business that attempts to give you a loan.
Common Deceptive Lending Practices
lending practices can take many forms.
Some of the common ones are listed below.
- Flipping: often targets the first time homebuyer
who may have bad credit or other financial issues. In these cases, the flipper buys the home,
makes cosmetic repairs to the home, handles all of the paperwork, may even
allow the home buyer to move in before the deal is complete. Flipper sells the
home at an inflated price and buyer ends up with a home that is not worth what
the buyer is paying.
Flipping: The lender encourages you to repeatedly refinance the loan and
often, to borrow more money. Each time
you refinance, you pay additional fees and interest points. That only serves to increase your debt.
Packing: The lender adds credit insurance, or other insurance products, to
your loan, which you may not need.
and Switch: The lender offers one set of loan terms when you apply, then
pressures you to accept higher charges when you sign to complete the
Stripping: The lender gives you a loan, based on the equity in your home,
not on your ability to repay based on your income. If you cannot make the payments, you could
end up losing your home.
Products: Many lenders offer loans in which the minimum payment does not
cover the principal and interest due, causing your loan balance, and
eventually, your monthly payments to increase.
In addition, many of these loans have variable interest rates, causing
your monthly payment to increase further if the interest rate rises.
- Deceptive Loan Servicing:
The lender does not provide you with accurate or complete account
statements and payoff figures. That
makes it almost impossible for you to determine how much you have paid or how
much you owe. You may pay more than you
If you have been a victim of any of the above listed types of deceptive lending, you should submit your case for a free review from a Lawyer. These deceptive
lending practices violate many state and federal laws involving
discrimination related to sex, race and gender, fair dept collection, fair
credit reporting and others. You may
also have rights under state laws that would give you the right to file a
lawsuit or modify terms of a loan agreement.
You should consult with legal counsel to determine your rights under
lending practices have become more prevalent as the economy
worsens. Deceptive lending is a problem especially for
minority groups, persons with low income or the elderly and persons with
financial problems. Deceptive lending practices
violate state and federal law. Consult
legal counsel to protect your rights in this area.