What is predatory lending?
In an effort to realize huge profits, predatory lenders target consumers who historically do not have access to mainstream lending institutions. This group of consumers includes minorities, the economically disadvantaged, the elderly and the uneducated.
Predatory lenders charge the borrowers higher rates of interest, require credit insurance products, exorbitant up-front fees and often include insurmountable pre-payment penalties. Predatory loans harm borrowers by making it difficult or impossible for them to keep up with their payments.
In recent years, predatory lending has grown dramatically. Wall Street investment banks have played an increasingly important role in raising funds for predatory loans. This secondary market has helped to sustain the growth in the predatory lending industry by enabling lenders to raise funds on the open market to expand their predatory lending activities.
Every week we are approached by another hapless victim of predatory lending. Their stories all share a common theme: the dream of owning their own home turned into a nightmare with extraordinary fees and threats of foreclosure.
Countrywide Home Loans
Countrywide’s lending practices have drawn consumer complaints and litigation amid a surge in home loan defaults. A former employee at Countrywide sued the company claiming he was wrongly fired after he criticized the firms lending practices. The lawsuit contends Countrywide fired him after he blew the whistle on fellow employees and outlined instances in which appraisers were being strongly encouraged to inflate homes’ appraised value.
What can I do?
If you or a loved one feel you have been the victim of predatory lending, we may be able to help. Please contact us today for a free legal consultation.