How to protect yourself from predatory lending....

Predatory lending is a term that is used to describe practices made by the lenders that are unfair and at times seems like discrimination. Many people have been victims of predatory lending practices, but there are a few groups that are at higher risk.  Most targets for predatory lending have been low income people, minorities, elderly, and less educated.

How to determine if you are a victim of predatory lending

If you suspect that you may be a victim or predatory lending, there are a few telltale signs that you are prey to this growing problem.  First, there is vital information missing from your files.  For example, there are certain disclosures that should be signed and retained, and other documents that need to have a notary seal.  If there are documents in your file without seals and signatures, you need to check things out further.

If you have not received important information, like your cancellation forms that state your rights and the lender's rights, you should be on guard.  There should also be information related to your payment terms and schedule in your file.

Additionally, if you notice that you have high penalty fees if you pay off the loan early, you are being subjected to predatory lending.  Predatory lending also includes the addition of insurance or other unnecessary products with the loan.  Mandatory arbitration requirements have also been found in many incidences of predatory lending.  This contractual stipulation makes it impossible for a borrower to seek legal help when they think that there is illegal or predatory lending occurring.

Avoiding predatory lending before you close the loan

First and foremost, the best way to protect yourself against predatory lending is to educate yourself. Learn the signs and ways to deal with issues that arise.  Always check lenders with government and consumer groups.  You should know the length of time the lender has been in business and how many and what types of complaints are made against the companies.

Pay attention to what is going on during the closing process

It is equally important to watch what is going on during the whole process, including the closing of the loan.  Make sure that you know the real value of the home you are seeking.  Check all documentation and duplicates to make sure everything is signed and looks the same.  Your best option for protection is to make sure that you have a legal representative thoroughly check the file to make sure things is right.  Most importantly, if at any time you suspect something illegal or not right, report the incidence to the proper authorities. Don't second guess yourself; if it seems wrong then usually your instincts are right. 

Remember that, to every problem, there is a solution. If you are facing problem with your home loans, solutions are there. However, predatory lending is not the solution. Take help from a good loan modification company instead. They will help you out and offer you a happy life. 

But hey, why worry? If you opt for loan modification, things will come in shape in no time.