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. The loans are often used for home repairs and to consolidate debt. To get the loan, borrowers usually mortgage their home - their main asset. Mortgage industry representatives argue that many borrowers have poor credit and could not obtain a conventional loan.