They say knowing is half the battle.
Here at www. NoBSVALoans.com, we want to keep our readers as well as fellow veterans informed. We believe that veterans need to know what’s out there and how they can protect themselves from abusive lenders. And because we don’t want anyone to become a victim of predatory lending, here are the seven things you need to know about predatory lenders.
•Jam-packed hidden fees. Abuse starts when no one’s looking. This type of lender likes to sandwich fees and ask for excessive and upfront prepaid interest.
•The never ending prepayment penalties. Understanding your loan agreements are critical. In most cases, pre-payment penalties need to be avoided.
•Loan flipping. Wikipedia simply defines it as “frequent refinancings that result in little or no economic benefit to the borrower and are undertaken with the primary or sole objective of generating additional loan fees, prepayment penalties, and fees from the financing of credit-related products.”
•Products you don’t need but end up getting. Predatory lenders offer financial products you don’t need. The borrower is then left with even more debts to pay.
•Use of mandatory arbitration clauses. Mandatory arbitration is a fancy way of saying “you can’t get a lawyer and go to court to protect yourself.”
•Negative amortization. NegAm occurs when the loan payment for any period is less than the interest charged over that period so that the outstanding balance of the loan increases. (Wikipedia)
As an added bonus, we are giving you some useful tips to avoid them.
•If it’s too good to be true, then it probably is. Beware of phrases like “No Income Verification” or “Guaranteed approval.” These phrases translate to “We don’t care if you can afford to make the payments or not.” Instead, look for loan experts who can offer you a 100% satisfaction guarantee.
•Ask for a list of all the fees involved and raise “what if questions.” Think of a worst case scenario and ask your lender about how you need to handle the situation. Watch out for unexplainable, excessive fees as well as prepayment penalties.
http://nobsvaloans.com/2009/05/characteristics-of-predatory-lenders/
