1. Mortgage Fraud and Predatory Lending

2. HUD Brochure http://www.hud.gov/offices/hsg/sfh/buying/l oanfraudbroc.pdfhttp://www.hud.gov/offices/hsg/sfh/buying/l oanfraudbroc.pdf

3. Predatory Lending Deception, fraud Manipulating borrowers through aggressive sales tactics Taking unfair advantage of borrowers Loan terms that are abusive Occurs primarily in the subprime lending market

4. Predatory Lending--Practices Loan flipping Asset flipping Excessive fees or packing Lending without regard for ability to repay Loan terms that are abusive Collusion among players in the market

5. Predatory Lending--Examples Misrepresenting loan terms Encouraging borrowers to misrepresent income, etc. Providing borrowers equity from the seller

6. Predatory Lending Best defenses – education of borrowers – making sure all transactions are arms length –creating a competitive climate in your program –education/ awareness of program managers