Predatory Lending Red Flags
In recent years, 'The American Dream' of home ownership has become a reality for so many families in record setting numbers. Home ownership is the main path to building wealth for Americans. Unfortunately for so many families, that dream is turning into a nightmare also in record setting numbers.
Abusive and deceptive mortgage lending practices became the norm in an unregulated and very profitable market that grew fast, and very quickly out of control. That resulted in a series of 'bad loans' with underwriting deficiencies that were destined to fail and send home owners into 'unnecessary' foreclosures and ending that families ability to expand their wealth.
According to HUD, the term 'predatory lending' is defined just as that- “granting loans without regarding the borrower's ability to repay”. These waves of foreclosures are 'unnecessary' because there are laws that were designed to protect families in that situation, specially when they were steered into that situation and set up to fail from the very beginning when the lender extended credit to them without considering or confirming their ability to repay that loan beyond the teaser rate.