The housing crisis revealed what many homeowners already suspected – that large banks and sub prime lenders were engaged in predatory lending practices. Homebuyers were regularly exploited until they were buried in debt. Since that crisis, there has been increased scrutiny on the practices of lenders, but predatory lending does still happen. Anyone who is concerned by the way they are treated by their lender would be well advised to research their legal options before they lose their home.
There are many different schemes and tactics that are considered predatory. The most common predatory lending schemes include:
- Abusive loan terms: Some lenders in Orange County trick homeowners into loans with excessively high interest rates and fees. These types of unfair loans may include balloon payments, extreme penalties for late payments, and large upfront fees. Predatory loan terms often lead to foreclosure proceedings during which the lender may utilize foreclosure fraud to further abuse the homeowner.
- Discriminatory targeted marketing: Predatory lenders are known for using public information to locate vulnerable individuals who they believe will fall victim to their schemes. It is not against the law to market to a large audience, but it becomes illegal when marketing is used in an exploitative manner. Once their targets are engaged in discussions, predatory lenders will then omit important details about the loan and trick homeowners into deals they cannot afford.
Victims of predatory lending often fall behind on payments, which makes it incredibly difficult to save their home and protect their credit. Many miss their opportunity to save their homes because they are unaware of their legal rights and options. If you have been the victim of unfair and illegal practices, make sure you discuss your situation with an experienced Orange County real estate attorney.