Predatory lending is a term used to describe a wide range of unfair financial practices. Here are some resources that can help you avoid being a victim.
Metropolitan Milwaukee Fair Housing Council
600 East Mason Street, Suite 200
Milwaukee, WI 53202
For legal advice regarding predatory lending activities, contact:
Legal Aid Society of Milwaukee
521 North 8th Street
Milwaukee, WI 53233-2404
Tel: (414) 765-0600
Fax: (414) 291-5488
General office hours: Monday - Friday, 8:00 a.m. to 4:30 p.m.
Lawyer Referral and Information Service
State Bar of Wisconsin
(608) 257-4666 (in Madison area)
1 (800) 362-9082 (outside the Madison area)
Remember, predatory loans are characterized by one or more of the following:
- Deceptive terms and conditions,
- Extraordinarily high interest rates,
- Exorbitant fees,
- Balloon payments (loans are amortized over 15-30 years, but after 2-5 years, the entire loan becomes due in full),
- "Flipping" (repeated refinancing of the loan, resulting in higher borrower costs)
- Mandatory arbitration clauses, and
- Concentrated marketing in minority and poor communities, often targeting older women.
With promises of debt consolidation, easy payment plans, and quick, easy application and approvals, predatory lenders prey on unsophisticated consumers, focusing especially on those with a lot of equity in their homes. Often, predatory lenders wrap the borrower's existing mortgage into debt consolidation loans, jeopardizing the borrower's equity and the home itself.