But even when armed with the national regulations, North Carolina officials said predatory lending continued to spread. Officials there point to a predatory lender who refinanced a Habitat for Humanity house with a 0 percent mortgage into a 14 percent loan. A Daily News investigation found a number of Philadelphia borrowers with predatory loans that charged 10 points plus thousands of dollars in fees. A borrower on welfare said a broker pressured her to lie about her income. Another was living on a fixed income when she received a loan she could not afford.
Borrowers get the loans in return for putting their houses up as collateral.
Once the borrowers get behind on the loans, lenders often refinance and charge more fees or take the houses through foreclosure. Despite a strong economy during the last three years, Philadelphia's foreclosure rate has doubled during that period. Studies show that the majority of predatory lending victims are the poor and minorities. Many are elderly. Some are on fixed incomes.