1. Avoid Predatory Lenders
Johanna Hahn
Senior Extension Agent, FCS
Virginia Cooperative Extension

2. Don’t get ripped off!
Be Cautious - be suspicious of anyone who offers you “bargain loans.”
Slow Down - Never act quickly.
Shop Around - You make the first contact. Not the other way around

3. Don’t get ripped off Avoid balloon payments
Ask questions, ask questions
Read carefully before you sign

4. Don’t get ripped off! You can change your mind
Think about a reverse mortgage
Get help if you think you have an unfair loan

5. Payday Loans = Costly Cash
Ads on TV, radio, strip malls
Short-term, high-rate loans
NEVER hand over a signed check
Roll-overs

6. Alternatives to Payday Loans
Consider the possibilities before choosing a payday loan
Look for the credit offer with the lowest annual percentage rate
Consider a loan from credit union, family or community-based organization

7. Talking with creditors
Compare the APR and the finance charge (which include loan fees, interest and other types of credit costs)
Ask your creditors for more time to pay your bills. Communicate

8. Tools for avoiding predatory lending
Make a realistic spending plan
Build an emergency fund
Is overdraft protection available?
Credit Counselors

9. Your rights
If you believe a lender has violated the Truth In Lending Act, you can file a complaint

10. How to Identify Predatory Mortgage Loans
Warning Signs that a loan may be abusive or predatory
Misrepresentation or fraud in the solicitation, marketing or origination of the loan
Home improvement scams
High interest rate. Can’t be justified

11. How to Identify Predatory Mortgage Loans
Balloon payments - large lump sum of $$ due at the end of the term of the loan.
Excessive prepayment penalty
Multiple refinancing
Credit insurance
Negative amortization

12. More warning signs…. Mortgage broker kickbacks
Making loans the elderly homeowner cannot afford to repay
Refinancing unsecured debt

13. Legal Challenges to Predatory Loans
Truth in Lending Act
Home Ownership and Equity Protection Act
Real Estate Settlement and Procedures Act
State Unfair and Deceptive Acts and Practices Laws

14. Legal Challenges to Predatory Loans
Equal Credit Opportunity Act
Fair Housing Act