Predatory Lenders

At this time, there is no common definition and no specific laws against the practice.  Predatory lenders and their associates often lack the real estate or mortgage licenses required. Their main goal is to end up with your property.

Predatory Lenders purposely target elderly homeowners with substantial equity, but less than perfect credit and could be in foreclosure. The predatory lender will sell the homeowner a high-cost mortgage loan by eliciting trust and high-pressure sales techniques. These lenders know that some older adults have cognitive issues and financial urgency.

There are different types of predatory lending with variations:

• Home Title Theft (See Blog)
• Loan Flipping & Packaging - Convince borrower there’s a benefit to refinancing then falsify paperwork by inflating appraisals, forging signatures, changing the loan packaging terms, backdating paperwork, hiding balloon payments
• Home Improvement Scams - Contractors ask for payment up front, they knock on doors using high pressure sales techniques. They also know “someone” that can lend money.
• Foreclosure Equity Stripping/Mortgage Relief Scam - Foreclosure filings are public record. The elderly may be in foreclosure but have substantial equity in their home. Predatory lenders base the loan on the amount of homeowner’s equity rather than how they qualify for the repayment of the loan.
• Warranty Deed - The predatory lender files a Warranty Deed transferring ownership of the property to themselves or someone else. They convince the borrower that the Warranty Deed is the first step to refinancing.