Predatory Lenders - Posted by Carl

Posted by RichV(FL) on October 08, 2006 at 14:40:42:


I agree. People are always jumping into things before doing the proper research. It seems to be more and more prevalent these days.
Thats why so many speculators from the 04-05 run up are now feeling a pinch from this flat market.

Do your homework folks! And stop blaming others for your lack of knowledge.


Predatory Lenders - Posted by Carl

Posted by Carl on October 06, 2006 at 07:19:46:

How do I know if a lender is some sort of predatary lender?

I have a lender who offered me some really nice terms on a loan (100% financing on investment property, 80/20 type of loan with pretty decent interest rates)

This seems to be a little “too good to be true” for me. His rates are about 1/8 percent lower than all of the other places that I checked and most of the other places will not do 100% on investment properties.

How can I be sure this place is not one of those predatory lenders that you read about?



Re: Predatory Lenders - Posted by Sharyn SJR

Posted by Sharyn SJR on October 07, 2006 at 19:16:59:

Compare his lender costs ( Items marked with a number in the 900’s on the Good Faith Estimate) with the costs of the other lenders. If costs are in line and he is still 1/8 lower I would say go for it. Also, you may want to ask him for references from Realtors, CPA’s, attorney’s, or other referral sources to ease your concerns about being taken for a ride.

Best of luck,

Sharyn SJR

Re: Predatory Lenders - Posted by IB (NJ)

Posted by IB (NJ) on October 06, 2006 at 23:39:31:

I agree with Sarge. What you have are uninformed borrowers who for some reason refuse to do due dilligence on a loan. I tend to believe that there is no such as thing as a predatory lender.

Do your homework.

Re: Predatory Lenders - Posted by Sgt.Sausage

Posted by Sgt.Sausage on October 06, 2006 at 17:58:22:

There are no “predatory lenders”.

What really happens is you have moronic borrowers agreeing to outrageous terms.

How is this the lender’s fault?

Re: Predatory Lenders - Posted by Michael Dolan

Posted by Michael Dolan on October 06, 2006 at 14:41:32:

Such a loan is possible.

Check your lender’s website for license information. Your particular broker should have a business resume available

Re: Predatory Lenders - Posted by njd

Posted by njd on October 06, 2006 at 10:17:58:

Common predatory practices include:

  1. Excessive fees and points
  2. Prepayment penalties
  3. Kickbacks to mortgage brokers
  4. Loan ‘flipping’
  5. Single premium insurance
  6. Mandatory arbitration clauses
  7. Ignoring borrower’s ability to repay
  8. Concealing the true cost of the loan
  9. Balloon payments
  10. Excessive interest rates

Re: Predatory Lenders - Posted by John Merchant

Posted by John Merchant on October 06, 2006 at 10:04:23:

While it’s good to be cautious and non-commital until you know all the lender’s terms and conditions, it does appear that you’ve come across a very nice situation.

Just get it all in writing and read it carefully so you know there are no hidden traps or landmines.

Re: Predatory Lenders - Posted by Come On Now

Posted by Come On Now on October 07, 2006 at 11:17:39:

Hey Sarge… using your logic, there are NO pedophiles either. Just little kids with a sweet tooth, and the poor old guy just happened to have some candy. They weren’t preying on anyone! Duh, guess not.

There are predatory lenders, who capitalize on comsumer stupidity. Is it the comsures fault that they are stupid.? Sure is, but that doesn’t give the Lender the right to lay the wood to them either. Instead of Predatory Lending, I might call it THEFT, w/o a firearm, in some of the more blatant cases that I have seen.

Re: Predatory Lenders - Posted by Max-Va

Posted by Max-Va on October 07, 2006 at 09:44:19:

I do not know where you got your list, But it is very subjective.
Example: #10 “excesive interest rates” What is excessive? 6% to a borrower with a 750 credit score in about normal but if a borrower has a 540 score the rates would be in the high 8’s or low 9’s. What is excessive?
Prepayment penalities, Balloons,Yeild spread, fees and points, are not predatory lending by themselves. RESPA docs must be signed and the borrower is informed as to all loan costs and terms. I agree some borrowers fail to understand, fail to compare rates and terms, fail to ask enough questions, but they are the first to cry foul and blame others for their sutpidity. Kind of like buying a Ford Expedition and complaining they don’t get 40+ MPG

Re: Predatory Lenders - Posted by IB (NJ)

Posted by IB (NJ) on October 08, 2006 at 11:42:12:

We’re not talking about kids looking for candy. We’re talking about ADULTS looking for loans. An ADULT needs to be RESPONSIBLE and take the time to READ and STUDY the subject area BEFORE he/she spend his or her hard earned money.