What is Predatory Lending?

In communities across America, people are losing their homes and their investments because of predatory lenders, appraisers, mortgage brokers and home improvement contractors who:

  • Sell properties for much more than they are worth using false appraisals.
  • Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.
  • Knowingly lend more money than a borrower can afford to repay.
  • Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
  • Charge fees for unnecessary or nonexistent products and services.
  • Pressure borrowers to accept higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.
  • Target vulnerable borrowers to cash-out refinances offers when they know borrowers are in need of cash due to medical, unemployment or debt problems.
  • "Strip" homeowners' equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.
  • Use high pressure sales tactics to sell home improvements and then finance them at high interest rates.
Remember: If a deal to buy, repair or refinance a house sounds too good to be true, it usually is!

Visit a HUD approved counseling agency (list available on www.HUD.gov) for more information and advice on predatory lending. Call 801-373-8200 ext. 235 if you live in Utah, Wasatch or Summit County. Community Action Services and Food Bank is a HUD approved Housing Counseling agency and has expertise in dealing with predatory lenders.

815 S Freedom Blvd.
Suite 100
Provo, UT 84601

Phone: 801.373.8200
Fax: 801.373.8228
Email:

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HUD Approved Housing Counseling Agency

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