Avoiding Predatory Home Loan Lenders

Predatory lending from a Home Loan Lender is a catch phrase for unethical lending practices committed by a small number of financial institutions or brokers. Many predatory lending practices are already illegal under federal and state laws, and many financial institutions have instituted comprehensive controls to protect consumers and support federal efforts to stop potential abuse. The Federal Reserve views predatory lending as a broad set of behaviors involving unfair, deceptive or fraudulent practices such as:

Making unaffordable loans based on the assets of the borrowers, rather than on the borrower's ability to repay an obligation. Inducing a borrower to refinance a loan repeatedly to charge high points and fees each time the loan is refinanced ("loan flipping"). Engaging in fraud or deception to conceal the true nature of the loan obligation from an unsuspecting or unsophisticated borrower. Predatory loans often contain pre-paid insurance premiums, balloon payments, negative amortization, unilateral loan call provisions, mandatory arbitrations clauses, or interest rate increases triggered by a borrower's default. Predatory lenders also engage in deceptive practices with regard to loan prepayment penalties or often make loans in which the lenders suspect that the borrower has little or no ability to repay.

Mortgage Loans Online's lending practices are designed to treat consumers fairly and equitably. Each loan underwritten by Mortgage Loans Online must demonstrate an identifiable benefit to the borrowers, and all borrowers must have clear ability to repay the loan. Mortgage Loans Online does not:

In addition, Mortgage Loans Online does not make loans with potentially abusive terms, such as:

Mortgage Loans Online firmly believes one of the most productive ways to protect borrowers against unscrupulous lenders is to partner with community groups to provide consumer education programs. A well-informed and educated borrower is the best defense against predatory lending. In developing solutions to predatory lending, Mortgage Loans Online supports the efforts of responsible community groups seeking to eliminate abusive lending practices.

Mortgage Loans Online has worked closely with community organizations to help the special needs of less sophisticated borrowers. Mortgage Loans Online is interested in constructive dialogue with responsible community groups committed to workable and fair solutions to protect consumers.