What is Predatory Lending and How to Avoid It. Avoiding Deceptive and Predatory Lending- Overview. Predatory Lending
A predatory loan is a sub-set of a sub-prime loan. It is an unsuitable loan designed to exploit vulnerable and unsophisticated borrowers. A predatory loan may have one or more of the following features: 1.) charges more in interest and fees than is required to cover the added risk of lending to borrowers with credit imperfections, 2.) contains abusive terms and conditions that trap borrowers and lead to increased indebtedness, 3.) does not take into account the borrower’s ability to repay the loan successfully, and 4.) often violates fair lending laws by targeting women, minorities and communities of color.
The National Anti-Predatory Lending Consumer Rescue Fund Program (CRF) is designed to get borrowers out of abusive loans and help borrowers at risk of foreclosure get a fresh start. All CRF loans are conventional home mortgage loans with market-like interest rates, no fees, no points, no prepayment penalties, and no insurance or ancillary product sales or offerings. The CRF has created a national predatory lending referral network in cooperation with other consumer rights, legal service, fair lending and the pro-bono Bar. The purpose of the collaboration is to maximize our collective ability to bring fair lending cases and complaints for matters that were previously perceived as consumer issues. NCRC is also reporting out "trends" data and refinancing problematic consumer loans in order to give fair lending victims a "fresh start.”
NCRC member agencies and others can gain access to NCRC’s Consumer Rescue Fund Program in the states of Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Nevada, New York, North Carolina, Ohio, Pennsylvania, Rhode Island,Texas and Wisconsin. Nationally, anyone from any state can access the Consumer Rescue Program for advocacy and mediation services against predatory lending.
The National Community Reinvestment Coalition in its partnership with HSBC-North America brings this opportunity to consumers that have been victims of unfair and abusive lending across the nation. The establishment of the National Anti-Predatory Lending Consumer Rescue Fund Programs shows that the collaboration of these entities can work together in furtherance of a strategy to challenge predatory lending practices and provide a safe and affordable mortgage loan.
Working together, economic justice can be a reality in your community. Join NCRC now! (www.ncrc.org-www.fairlending.org)