Debt Trap

27 Oct Debt Trap

Predatory lenders using your credit report information to push loans on you?

Your credit report information is sold to lenders who want you to borrow from them.

Lenders are still using your personal credit information from public records to sell their product, debt.

You might think the sub-prime crisis and following economic meltdown, as unfortunately accurately predicted by MIchigan bankruptcy attorney Kurt OKeefe, would have taught the lenders a lesson.

But no!

Lenders continue to buy information put together by the Credit Reporting Agencies, Experian, Equifax, and Trans Union being the big three.  They sell it, for a profit, of course.

Though not nearly as busy as in the good old days before the bubble burst, mortgage lenders still pay for these lists to send offers to lend you money, which include the amount of your current payment, and loan balance, and how much you would save.

I received one, that was for the same interest rate. It would save me nothing.  I guess they need to fine tune their software some more.

Mortgage companies were able to get notification as soon as you applied for another mortgage.  Then they could bombard consumers with confusing offers.  Many ARMs were palmed off as 30 year fixed rate mortgages, with the broker hammering the savings home.  The savings disappeared when the teaser interest rate expired.

Sub-prime consumers are still getting offers for credit.

The lesson for the consumer?

Just because you get an offer for a credit card or new mortgage, does not mean it is a good deal for you.  The lender makes the offer because it thinks it is a good deal for them>

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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