It would be unrealistic to think that a huge industry with so much money flowing through "its veins" wouldn't attract scammers and lenders who take advantage of people.
First, let's talk about what a predatory lender is. Simply put, it's someone or something that looks for people who are desperate, naive, or both. Then, they take advantage of your hurry by promising you a great deal and painting a beautiful picture of how this deal will go. When you find out later that they lied or misled you, they say, "You didn't read the fine print."
So, it helps to keep in mind at every step of finding and getting the right kind of mortgage for you that there are a lot of bad lenders in this market and that even the good ones don't always have your best interests at heart. This is one reason why you should never trust anyone, especially a lender, to look out for your best interests when doing a mortgage finance deal. Just keep in mind that you are the only one who can look out for your own best interests in this deal.
The best way to protect yourself from predatory lenders is to only use reputable lenders that you have been told about by a trustworthy website. The more you find out about a place's reputation, the more at ease or uneasy you will feel. And while you're doing your research, don't let the "but he seems like a nice person" drama distract you.
Predatory lenders who give out home equity loans may use deceptive lending, which is when the lender gives you false information and uses every trick in the book to trick you into paying more than you actually owe. The goal is to make it nearly impossible for you to know what's going on with your loan account.
Don't get down on yourself and think that everyone is bad and wants to take your money. Just be careful and aware, because most lenders are honest, but there are a few who have earned the name "predators."
