How Predatory Lending Works

How Predatory Lending Works: Author’s Note

We're in the process of buying our first house. I consider myself a pretty sharp guy, but financial matters have never been my strong suit and fine print might as well be written in invisible ink. That makes me a potential target for predatory lending. If I hadn't researched predatory lending tactics for this article, I may have believed a lender who tells me not to worry about the adjustable rate on my mortgage, because my income will probably go up in the next couple of years. Or I might not even think that it's a big deal for an interest rate to jump four percentage points in a single day. Unfortunately, millions of Americans were swindled by predatory lenders during the subprime lending craze. Lucky for people like me, there are new laws and regulations in place that ensure greater transparency and full disclosure during every step of the home buying process.


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