A topic that has seen increasing news time, of late, is predatory lending. Consumers lose billions of dollars every year in America to predatory lending practices. Common examples of predatory lending are found in mortgage and payday loans. These loans are designed in such a way that the consumer has no real chance of paying them back. Consumers are attracted to these loans because they feel it will help them with their problems, but unfair interest rates and hidden fees often leave the consumer worse off than before. Fortunately, Texas consumer law protects its citizens from companies engaging in predatory lending.
Payday Loans
Companies that give payday loans often engage in predatory lending. Excessive fees and hidden interest rates are two techniques these companies typically use to get as much money out of their customer as possible. These loans often have a short payback period. Typically this period is about two weeks. Statistics show that 75 percent of borrowers are unable to pay a payday loan back within this time frame. This leads to even more fees and increases in interest rates. Payday loans often have triple digit interest rates. These loans may provide quick cash, but the problems they cause are not even close to being worth it. Texas consumer law bans payday loan companies from engaging in predatory lending.
Mortgage Loans
Texas consumer law protects borrowers from abusive mortgage loans. A common element of an unfair mortgage loan is hidden, excessive fees. These fees are financed into the payments on the home and are often hidden. They can often exceed 5 percent of the total loan value. Another technique employed by predatory lenders is called loan flipping. Loan flipping is when the lender pressures you to refinance your loan. This is done under the guise of putting more money in your pocket. However, with this refinancing come more hidden fees and points that you must pay back.
Take Action
The Vethan Law Firm, PC offers a wide array of legal services. Headed by Charles M.R. Vethan, they can help you understand your rights under Texas consumer law. The Vethan Law Firm, PC has achieved the highest possible rating for professionalism and ethics. To receive legal advice, contact us or call 713-526-2222.
