Predatory Lending

U.S. home buyers now have one more headache to experience when buying a home. Predatory lending, which has no official definitions, but is readily apparent by excessive interest rates and fees, may be disguised as an affordable loan. The reality is that these loans can be extremely difficult to repay. The growth of the “subprime loans” phenomenon, by which consumers with little or poor credit can obtain a loan with a high interest rate, has led to unethical lenders taking advantage of those with limited resources and a strong desire to own or refinance a home.

While not all sub prime loans are predatory, all predatory lending disguises itself as a sub prime loan opportunity. Consumers who don’t qualify for conventional loans need to be extremely careful in weighing their options. Historically, minorities, immigrants, and the elderly have been unfairly diverted to the sub prime market, and should exercise especial diligence in examining any potential loan conditions.  ■