The following is excerpted from the website of the United States Department of Housing and Urban Development (HUD): http://portal.hud.gov/hudportal/HUD?src=/states/connecticut/homeownership/predatorylending
WHAT IS PREDATORY LENDING, ALSO KNOWN AS ABUSIVE LOAN PRACTICES?
Predatory lending is another term for loan fraud committed by mortgage lenders, home appraisers or real estate professionals on consumers who are trying to buy a home, obtain re-financing or make improvements on their home. A bad loan obtained from a predatory lender may cause homeowners to lose their chance to buy a desired home, lose the equity in their current homes or force them to sell their homes when they are unable to make loan payments.
Predatory lenders can cause consumers to lose their homes and property investments by practices such as:
WHY ARE OLDER ADULTS TARGETED BY PREDATORY LENDERS?
Anyone can be the victim of a predatory lender, but older homeowners are often particularly vulnerable because many of them are on fixed incomes and rely on the equity in their homes as their primary financial assets. Among the scams targeted to seniors are charging high interest rates on loans, selling credit insurance as part of the loans, making loans that the homeowner is unable to repay and refinancing unsecured debts, such as credit cards or medical costs into the loan. For further information, visit the website of the National Consumer Law Center: www.nclc.org/images/pdf/older_consumers/consumer_concerns/cc_elderly_victimized_predatory_mortgage.pdf
HOW DO I AVOID BECOMING A VICTIM OF PREDATORY LENDERS?
Consumers can take the following steps to avoid becoming a victim of a predatory lender:
WHERE DO I COMPLAIN ABOUT A PREDATORY LENDER?
Consumers in Connecticut who want to report predatory lending practices can contact:
TO FIND PROVIDERS IN CONNECTICUT’S COMMUNITY RESOURCES DATABASE:
Search by service name: Predatory Lending Assistance
SOURCES: Better Business Bureau of Connecticut website; Federal Trade Commission website; “Helping Elderly Homeowners Victimized by Predatory Mortgage Loans”: article posted on the National Consumer Law Center website; State of Connecticut Department of Banking website; State of Connecticut Department of Consumer Protection website; U.S. Department of Housing and Urban Development website
PREPARED BY: 211/pt
CONTENT LAST REVIEWED: November2016