Mortgage Fraud and Predatory Lending is a term used to describe a variety of practices that mislead consumers by providing them with unaffordable or inappropriate loans, or gouging them with exorbitant fees and usurious interest rates on their loans. When it happens on home mortgage loans, predatory lending practices strip the equity from a home.

If you have experienced any of the following while trying to secure a home loan, you may be a victim of mortgage fraud:

• Kickbacks to mortgage brokers (Yield Spread Premiums, where a broker can get a loan at a lower interest rate, but tells the borrowers only about the higher rate loan so that the broker will receive a kickback from the lender)
• A lender’s arrangements for payments that are higher than you can afford
• Falsifying loan applications (i.e., a lender may state on a loan application that a prospective borrower’s income is greater than it really is in order to facilitate approval of the loan)
• Making loans to mentally incapacitated homeowners
• Forging signatures (lender forges your signature on an early disclosure)
• Bait and switch tactics, such as substantially changing loan terms at closing
• High annual interest rates
• High points or padded closing costs
• High loan origination fees
• Balloon payments; Padded appraisal costs (inflated home values in appraisal); Padded recording fees
• Bogus fees (e.g., HUD will state that the broker has a fee for underwriting fee, when in fact brokers have no underwriting fee)
• Itemizing duplicate services and charging separately for them
• Misinforming the prospective homebuyer that credit insurance is required and/or failing to disclose that they are earning a commission on the insurance
• Forcing placed homeowners insurance (lender falsely claims that homeowner does not have insurance and then gets an undisclosed commission for selling it to them)
• Repeated refinancing (flipping)
• Daily interest when payments are late
• Excessive prepayment penalties
• Foreclosure abuses
• Home improvement scams