Albany County, New York
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Predatory lending is the practice of mortgage loans being priced above the prime competitive market. This is also known as "Sub Prime Lending," which extends credit at higher rates than prime to people who are higher credit risks or have impaired credit.
Predatory lending is the practice of mortgage loans priced above the prime competitive market. This is also known as Sub Prime Lending, which extends credit at higher rates than prime to people who are higher credit risks or have impaired credit. This form of lending is increasing rapidly as 90% of Sub Prime loans have been made in the past six years.
Predatory lenders often prey on older homeowners because of the substantial equity most have in their homes. A recent AARP study shows that 78% of older Americans are homeowners and that 80% of these homeowners (65 and older) own their homes free and clear. Beside the equity older homeowners have in their homes many live in older houses in need of repair and they are less likely to perform the repairs themselves. They are also on a fixed income and may need equity for medical and other expenses as well as for their home improvements.
Tips to protect yourself from Predatory Lending:
Common predatory lending practices:
Equity Stripping: The lender makes a loan upon the equity in the consumer’s home; if the consumer cannot make the payments they lose their home.
Loan Flipping: Refinancing a loan where the consumer cannot make payment with a new long high term high cost loan. Each “flip” has an additional cost of points and assorted fees to the homeowner.
Packing: The consumer receives a loan that contains charges for services the consumer did not request or need i.e. the forced purchase of credit insurance.
Hiding the Balloon: The consumer believes they have applied for a low rate loan only to learn that it is a short-term balloon, which will have to be refinanced within a few years.
Discrimination: The lender charges a minority consumer more than a similarly situated consumer who is not a member of the minority.
112 State Street,
Albany, New York 12207
Phone (518) 447-7581
Fax (518) 487-5048
Copyright (c) 2012 Albany County, New York. All Rights Reserved.