A good friend of mine and a shrewd business professional was looking into refinancing to lock in a lower interest rate — which meant for the same amount of payment more was hitting the principal and less that ever ellusive interest cloud.  It made sense to me.  But, just as the deal was to close, the lender did something that made me wonder — how many others have had this happen?

At the 12th hour of the signing, the lender tried to change the terms of the loan — “to make it go through” he said.  “Not so,” she said.  My friend, because she is a business professional had not only an attorney assisting her with the transaction, but she had the first hand knowledge to recognize the scam that was being played out.  The lender was clearly trying to pad the deal with higher closing costs and some additional insurance for which he was a recommended broker.    He lost the deal — and he now has a complaint with the regulatory agencies to deal with.  When the complaint was made the agency said “This is unfortunately not an isolated incident that has been on the upswing with lenders dealing with single women and minority or elderly populations.  It is as common as online credit card scams.  It is a travesty.”

Not all lenders are bad, but there are those that can only be considered to be predators.  Predatory lending is illegal and unethical.  The predatory lenders relies on the borrowers ignorance and desperation to cloud their  judgment — that’s the only way the scheme will work.  Before you refinance, take time to educate yourself and/or hire a professional to protect your interests and ultimately your investment.   Do your homework and shop around.  Comparison shopping will identify patterns of what the true cost of the refinancing would/should be.  Last, try not to use refinancing as an escape from a bad situation — when desperation or emotions drive your business ventures, it becomes very hard to remain objective enough to protect the investment.  Never act upon something like a home lone or a refinance loan when you feel pressured or rushed.  Take your time, read the documents, do your homework, and protect your money and investment.