Predatory Lending Overview

A mortgage is a mathematical instrument of leverage, allowing an individual to control a high-value physical asset using a fraction of the necessary liquid capital. When structured correctly, it is the primary engine of wealth creation in American households. However, when the parameters of this financial instrument are intentionally engineered to fail, it ceases to be a tool of leverage and becomes a mechanism for wealth extraction. This is the realm of predatory lending. For a real estate professional, understanding the mechanics of these loans is not merely academic; it is vital to protecting the integrity of your transactions and the financial survival of your clients.