Predatory lending has victimized many West Virginia residents. Each year, thousands of loans are made with unreasonable terms and abusive high lending fees. Many of these victims are the elderly, poor and minorities who do not have the educational or financial means to acquire a traditional, fair loan from a local bank. Because of these terms, many of these victims are unable to pay their loans, and their properties end up in foreclosures.
Predatory lending is a term that is commonly used to describe the unconscionable lending practices of a mortgage lender or broker. Typically, as a result of predatory lending, a borrower is placed into an unfair loan with abusive lending terms. Some common predatory lending practices can include:
- Bait and Switch: Lender offers one set of favorable terms when the borrower applies for a loan, but then changes them for worse terms at the time of the loan’s closing
- Fraud: Concealment and fraud by the lender of the loan’s terms
- Prepayment penalties: Lender charges exorbitant fees if the borrower pays off the loan earlier or refinances the loan
- Loan flipping: Lender provides unnecessary refinancing of the loan with no apparent benefits to the borrower
- Balloon payments: A loan with an outrageously high payment due at the end of the loan’s lifetime, often hidden at the time of closing
- Equity Stripping: Lender makes an unconscionable loan based on the borrower’s home equity regardless of the borrower’s ability to repay the loan
- Insurance Packing: A loan that charges borrowers for insurance coverage that a borrower does not need or want or provide not benefit
- Phony Appraisal: Lender obtains a phony appraisal that supposedly reveals equity in the property and recommends an “equity loan” that the homeowner cannot afford
Please contact Pepper and Nason by calling us (304) 346-0361 today if you feel you are a victim of predatory lending.