mcfarlin llp predatory lending blog presentation
Post on 06-Aug-2015
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According to a post created for the McFarlin, LLP website, some lenders are taking advantage of
the dire housing market to attempt schemes and tricks
against their loan applicants.
The resulting scam is entitled
predatory lending practices, and large banks and sub prime
lenders typically engage in the
fraud.
This is when a lender offers high interest rates and fees,
producing balloon payments, extreme penalties for late
payments and large upfront fees.
Unfortunately, this means of predatory lending practices often leads to foreclosure proceedings; the lender may utilize foreclosure
fraud to further abuse the already tricked homeowner.
The second means of engaging in predatory lending practices is entitled
discriminatory targeted marketing.
Essentially, this requires the bank to use public information to locate vulnerable individuals—people they think may fall victim to schemes.
It should be noted that it is not illegal to market to a large audience; however, legality
becomes an issue when banks use marketing to exploit groups of
consumers.
In this method, targets are engaged in discussions, in which certain important facets of information about the loan are omitted, resulting in consumers that are tricked into a deal they
cannot afford.
In both of these methods, victims fall behind on their payments, making it
very difficult for the consumer to save their home or protect their credit.
As a result, many fall to
foreclosure, as opportunities to
save the home are missed, due to a
lack of knowledge in
their legal rights.
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