A predatory mortgage loan is an unsuitable loan intended to exploit vulnerable and unsophisticated borrowers. A predatory loan typically has one or more of the following features:
- Lender charges more in interest and fees than is required to cover any “added risk” of lending to borrowers with credit imperfections or past credit problems;
- Contains abusive terms and conditions that trap borrowers and lead to a spiral of increased indebtedness (in effect, “stripping” assets and wealth from the borrower;
- Does not take into account the borrower’s ability to repay the loan, and/or history of paying bills on time, especially rent payments; and
- Often violates fair lending laws by targeting women, minorities and communities of color with predatory practices.
The main targets of predatory mortgage lenders are families and individuals with less than perfect credit histories. These persons may have limited incomes, but do have equity (value) in their homes and historically have been the elderly, minorities and women.
Predatory Mortgage Loans 
