Released: February 14, 2006

Be on the lookout for predatory lenders

Source: By Mary Hunt, Everyday Cheapskate [Cincinnati Post]

Homeowners beware. These days, home-loan scam artists are lurking around every corner. They’re hungry, they’re determined and they’re coming after your equity.

Unscrupulous loan peddlers are known as predatory lenders because of their uncanny resemblance to vultures. These loans encourage people to consolidate their debts and suggest this will prevent them from overspending and maxing out their credit cards again.

Predatory lenders deal in asset-based lending: They make the loans based solely on the amount of equity a borrower has in a property rather than considering the borrower’s ability to repay the loan.

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