What is Predatory Lending?

Predatory Lending Considerations

Subprime lending is not synonymous with predatory lending, and loans with the features described as Subprime are not necessarily predatory in nature. However, institutions should ensure that they do not engage in the types of predatory lending practices discussed in the Expanded Subprime Guidance. Typically, predatory lending involves at least one of the following elements:

  • Making loans based predominantly on the foreclosure or liquidation value of a borrower’s collateral rather than on the borrower’s ability to repay the mortgage according to its terms;
  • Inducing a borrower to repeatedly refinance a loan in order to charge high points and fees each time the loan is refinanced (“loan flipping”)’or
  • Engaging in fraud or deception to conceal the true nature of the mortgage loan obligation, or ancillary products, from an unsuspecting or unsophisticated borrower.

Institutions offering mortgage loans such as these face an elevated risk that their conduct will violate Section 5 of the Federal Trade Commission Act (FTC Act), which prohibits unfair or deceptive acts or practices.

In North Carolina in addition to reporting suspicions of Predatory Lending to the Federal Trade Commission you should also register your complaint with the Office of the North Carolina Commissioner of Banks.

Comments

  1. Erin (hopeful in Florida) says:

    Hello again, I told you I would keep you posted on this exception for our claim check, well I am happy to say they actually granted it and have endorsed and sent it back, as I see so many others going through hoops, I would recommend for them to check with mortgage company to see if they will grant this same possibility and to do ask they ask for then to do so, as it is possible and will help in getting the Tristis

    1. Erin (hopeful in Florida) says:

      accidently sent previous message without finishing, ooops…..you can get repairs done quickly and then they will just require an inspection once complete for their records that work was done.

  2. e says:

    my mortgage company vericrest financial was given my insurance check it was sent in
    by certified mail i’ve been paying my insurance for years and never made a claim
    i file the claims first of oct 2011 i contacted the represent in loss drafts and he stated i
    couldn’t have the money to fixed my home i want to ask a question vericrest didn’t purchase
    my porched we paid out of pocket for my front porch and it is free standing they know
    that they did not purchase this porch we built the porch ourselves now they are holding
    our check and wont send it to us there r some other repairs that i understand they have
    the right to have some say so over but how do they get to hold money they didn’t give
    and the porch is not attached to the house could someone email me and let me know
    we are not rich people and the representive told me that we had to have a contracter
    come out and do the work when we built the porch that money belongs to us. will someone
    reply