Defend against predatory lending

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Becoming an informed consumer is a crucial defense against predatory lending practices. Carefully read all contracts, paying close attention to interest rates and the consequences of missed or late payments. Stay alert for misleading marketing tactics and high-pressure sales techniques. While these loans may be promoted as a solution to financial difficulties, they often result in higher and more expensive debt.

Understanding your financial limits, particularly with mortgages, is essential. In addition to potential financial loss, falling behind on mortgage payments puts your home at risk. Remember that you have the ultimate decision-making power in determining how much you borrow. Never allow anyone to pressure you into taking on more debt than you can comfortably manage.

Building a positive credit history is also key. Paying all debt obligations on time, reducing credit card and personal loan balances, maintaining longstanding accounts, avoiding excessive credit applications, and having a mix of credit accounts contribute to a favorable credit profile. By demonstrating responsible borrowing behavior, you increase your eligibility for loans with low interest rates and favorable terms.

Protecting yourself against predatory lending practices involves understanding your rights. 

According to federal law, lenders must disclose loan terms in applications or contracts, typically in the Truth in Lending Disclosure Statement. Take the time to carefully read and comprehend these documents before agreeing to the terms. If you believe a lender has acted unlawfully or misled you, you can contact your state's attorney general's office and the Federal Trade Commission.

The Fair Housing Act provides crucial protection for potential buyers. Lenders must not base lending decisions on factors such as race, color, national origin, religion, sex, familial status, or handicap. This legislation also extends protection to individuals on maternity, paternity, pregnancy, parental, and disability leave during the home mortgage loan application process. Discriminatory language is prohibited in advertising as well.

If you experience discrimination, you can contact your local HUD (U.S. Department of Housing and Urban Development) Office to file a complaint. Various resources, including TTY phone lines 1-800-927-9275, interpreters, tapes and Braille materials, and assistance with completing forms, are available for individuals with disabilities. You can also fill out the Housing Discrimination Complaint Form.

If you require further assistance, HUD-certified housing counselors can provide guidance and support in navigating these matters.