What is a Predatory Lender?

Several months ago, the 3,000-member California Association of Mortgage Brokers (CAMB) created the first real definition to describe the abusive lending practices of predatory lenders. According to the CAMB, predatory lending was described as "placing consumers in loan products with significantly worse terms and/or higher costs than loans offered to similarly qualified consumers in the region for the primary purpose of enriching the originator and with little or no regard for the costs to the consumer."

Most mortgage brokers provide good service to their clients, yet there are a few who use unethical practices. Those brokers, called "predatory lenders" by the CAMB, not only over-charge consumers, but they also get paid in other hidden ways.

For instance, avoid lenders who charge more than the usual three percent fees for a conventional loan or four percent fees for a government-sponsored loan. Even non-prime lenders can't justify excessive fees.

Also watch for hidden loan costs, such as the Yield-Spread Premium. This term refers to a rebate that's given to brokers when they place a borrower at an interest rate higher than the rate for which they qualify. Refuse to pay yield-spread premiums and unwarranted fees, and avoid brokers who include these charges in their loans.

Besides charging high points and fees, predatory lending practices may also include such things as "packing" credit insurance on to a loan, making mortgage loans to homeowners who don't have the income to repay them, and repeatedly refinancing loans.

When it comes to obtaining a real estate loan, it's your responsibility to become a knowledgeable consumer, which means you'll need to keep asking questions of your lender. If you aren't able to get clear, easily understandable answers to your questions, it's possible that you may be dealing with a predatory lender.

Copyright © 2005 Jeanette J. Fisher - All Rights Reserved.

Jeanette Fisher, author of "Credit Help! Get the Credit You Need to Buy Real Estate," helps people buy their dream home or finance multiple investment properties. Jeanette teaches real estate investing and Design Psychology. For help with your credit or answers to your questions, visit the Real Estate Help Credit Center at http://www.recredithelp.com Subscribe to Credit Help! Tips. Send a blank email to CreditTips at reCreditHelp.com

Get the credit you need to buy your dream home or multiple investment properties!

---

Realtors - Self Promote Your Way To Success

Okay, so we all can agree - listings are the... Read More

Atlanta Georgia Real Estate - Marietta - East Cobb, Roswell, and Alpharetta

Whether you're a "move up" home buyer, downsizing, or relocating... Read More

Popping The Real Estate Bubble Myth!

If you turn on the TV, listen to the radio,... Read More

Title Insurance Protects Your Financial Investment

You purchase homeowners insurance to protect yourself financially in case... Read More

Seven Tips in Choosing Maui Income Properties

Aloha! If you are interested in choosing a Maui income... Read More

Becoming A Battle Hardened Real Estate Veteran Without All The Scars

Step 1 is always to determine the fair market value(FMV).... Read More

Real Estate Investing - Protect Your Privacy

An irate tenant or disgruntled home-buyer, with the help of... Read More

An Overview of Easements

Title insurance is generally associated with insuring a purchaser's or... Read More

Why Use a Property Manager?

Most experienced property investors use property managers. Why? Because they... Read More

How To Find Your Dream Home In Belize

Shopping for property in Belize is not as simple an... Read More

10 Home Purchase Abroad Tips For Success

Are you seeking your little corner of sun drenched heaven... Read More

Understanding the Escrow (Closing) Process

1. What is an escrow?Escrow is defined as a process... Read More

To Buy or Not to Buy

Purchasing a home is a major emotional and financial decision.... Read More

Buying Country Acreage and Rural Properties, To Buy or Not To Buy

Almost anyone can become a rural property owner; if you... Read More

Use Targeted Decorating To Get A Higher Price For Your House

This article will show you how to sell your home... Read More

Conversation & The Real Estate Investor

One key that makes investors is conversation or should I... Read More

Top 7 Reasons Why FSBOs Fail To Sell Their Home On Their Own!

In the United States, less than 10% of all For... Read More

Boston Real Estate - Interest Rates and Inventory Must be Analyzed when Selling Your Boston Home

When selling your Boston home, it's good practice to be... Read More

Selling Property - Valuing Your Property

Selling property privately has many advantages over using an estate... Read More

Before You Buy A House ? Top 10 Tips

There are serveral things you need to think about and... Read More

Real Estate: Buyers Agent, Sellers Agent & Dual Agent (defined and explained)

There is a relatively new and not always well understood... Read More

Create a Great Webpage to Sell Your Home

The majority of people in the UK who are looking... Read More

Home Selling: Making It Easy On Yourself!

It's a dream for many to buy and take ownership... Read More

Relocation Humor: Why I Bought A House

The Rental Experience in South FloridaReaders: This is based on... Read More

Purchasing Florida Investment Property And Various Considerations

Purchasing Florida Investment PropertyConsidering researching the purchase of Florida Investment... Read More

Should You Buy a House or a Condo?

A big debate these days is whether or not to... Read More

Yes But, How Do I Evaluate Buying Undeveloped Land And Get Into The Business?

These real questions on buying undeveloped land are answered by... Read More

Real Estate Bankruptcy

Although real estate bankruptcy cases no longer dominate the bankruptcy... Read More

How to Show & Sell Your California Home

Seller's Showing Instructions1. When the agent arrives with the potential... Read More

Achieving Positive Cash Flow from Your Real Estate Investments

Even if you're counting on rising property values to eventually... Read More

How to Find the Sweet Spot in Real Estate Investing

Psssssssssst, Want to know a great way to make FAST... Read More

5 Things to Look for in a Property Appraiser

Homeowners who are seeking a property appraiser often ask "How... Read More

Purchasing Land: What To Look For

It doesn't take long to realize that finding the right... Read More