Signs of a Predatory Loan

Although some of these practices are predatory in nature, not all are illegal. Please consult with an attornery to help determine whether or not legal action can be taken.

• Loan is 'packed' with high and unnecessary costs.
  
  
• High interest rates, fees and closing costs.
  
  
• Prepayment penalty.
  
  
• The payment schedule on the loan includes a large 'balloon' payment.
  
  
• Negative amortization.
  
  
• Inflated appraisal costs.
  
  
• Bogus broker fees.
  
  
• Additional, unwanted services like credit life insurance, are added into the contract.
  
  
• New loan shifts unsecured debt into mortgages.
  
  
• High loan-to-value loan (in excess of home's value).
  
  
• Forged loan documents or application.
  
  
• Backdating of documents.
  
  
• Rushed loan closing.
  
  
• Terms at closing different from what the borrowers thought they would get (the result of a 'bait and switch' tactic used by the predatory lender.
  
  
• Loan has a mandatory arbitration clause.
  
  
• Multiple refinancing or 'flipping'.