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Predatory Lenders Target the Elderly Predatory lending is the practice used by some lenders whereby money is loaned to homeowners based on the equity in their home rather than the ability of the homeowner to repay the loan. If homeowners are unable to make loan payments, then they will not only loose their house but they will also loose any equity. A predatory lender roams older sections of our communities to locate a home with equity. The predatory lender then convinces the owner to accept a loan that charges a lot of fees and interest at terms that usually causes the borrower to default and lose their home. Most victims of predatory lending programs are the elderly, and a very high percentage of these elderly are low or moderate-income individuals who have little wealth outside of their home. Since predatory loans are usually only detected well after the loan has closed, the damage is already done, the equity is gone, and the borrower is too poor to start any serious legal challenge. At this time, any reimbursement by the brokers or lender is usually impossible. Most predatory lending victims do not report the crime since they do not know who to report it to. They simply lose their home and are forced to live in very poor rental housing. Why Predatory Lending Occurs 1) Many elders fall victim to predatory lending for one or two reasons: They simply do not realize they are targets of predatory loans and/or they become confused in the loan process. In many instances the loan brokers deceive the elderly into falsifying information on the application, pressuring them to apply for the loan, and/or pressuring them to apply for more than they need. 2) The elderly have grown up trusting financial institutions and the lending industry. The concept that someone is posing as a lender and is trying to steal their money is simply a foreign concept to this population. This makes them a target. 3) Predatory lenders use this trust to convince the customer to sign for loans with high interest rates and loan fees, accept monthly payment terms they cannot make, tell them to sign blank forms that they will complete later, and/or failure to provide required loan disclosures. 4) This crime occurs because the victims of predatory loans are frequently not aware the loans will seriously hurt them until after the documents are signed. 5) The victims are not aware that they have other choices. This is a serious problem in America and you can help
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