Don't Borrow Trouble is an anti-predatory lending effort organized by Freddie Mac.
The program's aim is to protect vulnerable consumers from the dangers of Predatory Lending - high-cost,
unfair loans with impossible terms. These lenders often target minorities and the elderly, exploiting their desires for
homeownership and/or home improvements.
What is Predatory Lending?
Predatory lending takes advantage of borrowers by charging higher fees and hidden costs. Every borrower is at risk,
however the risk increases for minorities, the elderly and those with less than perfect credit.
Sub-Prime vs. Predatory Lending
Sub-Prime
- Higher rate since lender is taking a larger risk
- Payments are setup within the borrower's ability to repay the loan
- Terms of the loan are fully disclosed
Predatory Lending
- Excessive interest rates and/or higher points and fees
- Approving a loan without consideration of the borrower's ability to repay
- Fail to disclose the true terms of the loan
- Pressure borrower to sign documents without understanding the terms of the loan
- "Flipping" or frequent refinancing of the loan
For more information, please contact us or visit the Don't Borrow Trouble website
which can be found at: http://www.dontborrowtrouble.com