Home Loans
How to Avoid Predatory Lending Practices
(presented by www.refinance-refinance.net - mortgage lenders)
By Christopher Cooper
Predatory lending is an illegal and unethical practice that generally affects women, minorities and the elderly. The reason that some lenders resort to this practice is to pad the costs to the uninformed borrower, thereby adding to their own bottom line.
One sure sign of predatory lending is when terms are changed at the last minute, usually at closing, with the lender claiming they must be accepted for the loan to go through.
It usually takes the form of higher interest rates, higher closing costs or the requirement to purchase expensive insurance from the lender or a recommended broker.
The lender can assign or try to steer people with acceptable credit to a sub-prime category, which almost always means higher interest rates and closing costs. As many as half the victims of this practice would qualify for better terms if they shopped around more.
Another version of this practice is when the lender assigns higher costs to certain people based on undisclosed credit policies. This is related to what used to be know as red-lining, where certain racial groups or entire neighborhoods either couldn
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