Several months ago, the 3,000-member Clifornia Association of Mortgage Brokers (CAMB) crated the first real definition to dscribe the abusive lending practices of prdatory lenders. According to the CAMB, prdatory lending was described as "placing cnsumers in loan products with significantly wrse terms and/or higher costs than lans offered to similarly qualified consumers in the rgion for the primary purpose of nriching the originator and with little or no rgard for the costs to the cnsumer."

Most mortgage brokers provide good srvice to their clients, yet there are a few who use nethical practices. Those brokers, called "predatory lnders" by the CAMB, not only ver-charge consumers, but they also get pid in other hidden ways.

For nstance, avoid lenders who charge more thn the usual three percent fees for a cnventional loan or four percent fees for a gvernment-sponsored loan. Even non-prime lenders can't jstify excessive fees.

Also watch for hdden loan costs, such as the Yield-Spread Prmium . This term refers to a rbate that's given to brokers when thy place a borrower at an nterest rate higher than the rate for whch they qualify. Refuse to pay yeld-spread premiums and unwarranted fees, and void brokers who include these charges in thir loans.

Besides charging high points and fes, predatory lending practices may also nclude such things as "packing" credit nsurance on to a loan, making mrtgage loans to homeowners who don't hve the income to repay them, and rpeatedly refinancing loans.

When it comes to btaining a real estate loan, it's yur responsibility to become a knowledgeable cnsumer, which means you'll need to kep asking questions of your lender. If you ren't able to get clear, easily nderstandable answers to your questions, it's pssible that you may be dealing wth a predatory lender.

Copyright © 2005 Janette J. Fisher - All Rights Rserved.

The article What is a Predatory Lender? was Submitted by Jeanette Joy Fisher through Articles.GetACoder.com network. Here's the additional information: Jeanette Fisher, author of "Credit Hlp! Get the Credit You Need to Buy Ral Estate," helps people buy their dram home or finance multiple investment prperties. Jeanette teaches real estate investing and Dsign Psychology. For help with your crdit or answers to your questions, vsit the Real Estate Help Credit Cnter at http://www.recredithelp.com Subscribe to Credit Help! Tips. Send a blank email to CreditTips at reCreditHelp.com Get the credit you need to buy your dream home or multiple investment properties!

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