What Is Predatory Lending, And What Can I Do About It?
Everyone is out to make a profit, and this includes banks and other lenders. The way a lending institution makes money is by making loans. The interest received on loans that are not paid in full monthly adds up quickly, and is a major revenue source for creditors. This is why you receive “offers” in the mail for everything from car and home loans, to loans that will pay for your vacation. If you are able to make the payments, and the terms are favorable, this type of advertising is harmless. But, when the terms are unreasonable, or the lender deceives you into making the loan that problems arise.
The practice is referred to as predatory lending, and some of the signs include:
● Fees in excess of the standard fees for the type of loan, a loan made to someone with a credit score similar to yours, and a loan made in your geographic area.
● Penalties if you pay off the loan before its maturity date.
● Loans by companies that advertise things like “bad credit OK”.
When talking about a mortgage loan, if you are not given the chance to escrow your taxes and insurance you should also question whether the loan in question is the right one for you. It also a good idea to be wary of loan structures that pay off higher rate debts by repeated refinance attempts. The more often you rely on the equity in your home for income, the more likely you are to end up without any equity at all. This can make resale difficult, and leave you with few financial choices. Lenders that gloss over these concerns may be engaging in predatory lending, and you should get a second opinion. There are laws against these practices, and if you have been the target of a predatory lender, you can take action to recovery any damages you’ve suffered.
Call a Plantation, Florida debt relief attorney today for more information on your legal options against a predatory lender. We help you understand the process and work towards results that make sense. Schedule an appointment to learn more.