AARP Indiana Legislative Issues Survey: Predatory Mortgage Lending Demographics and Reference - asse 2025

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8 Signs of Predatory Mortgage Lending Sign 1 - Big Fees. Sign 2 - Penalties For Paying Off Early. Sign 3 - Inflated Interest Rates From Brokers. Sign 4 - Steering And Targeting. Sign 5 - Adjustable Interest Rates That Explode Sign 6 - Promises To Fix Problems With Future Refinances.
Review the loan documents carefully. The Truth in Lending Disclosure has the basic terms and conditions of the loan. Make sure it lists the interest rate and monthly payments you were promised. The Settlement or Closing Statement shows the fees you are being charged for the loan.
High interest rates: A loan interest rate that is much higher than the interest rate offered by insured banks and credit unions is a tip-off that a loan might be predatory. The best way to avoid higher interest rates is to shop around to at least three lending institutions to compare offers.
The term predatory lending is used when a company or lender offers financial services like loans, check cashing, pay day advances, or bill payment to individuals with unfair, deceptive, or abusive terms like extremely high interest rates and fees or unreasonable repayment conditions.
Make sure the lender and broker you are dealing with are licensed by the State Banking Department. You may contact the Banking Department at (800) 522-3330. Watch out for hidden terms, such as prepayments and balloon payments. Be wary of loans offered through door-to-door sales or telemarketing solicitations.
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There are several red flags you should be on the lookout for in order to steer clear of a predatory lender. Here are the main ways you can identify if a lender is trying to take advantage of you: Look for high or hidden fees. High interest rates and other fees are common tactics used to take advantage of borrowers.

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