The lender hides or misrepresents the true costs, risks and/or appropriateness of a loan’s terms, or the lender changes the loan terms after the initial offer.

Fees and costs (e.g., appraisals, closing costs, document preparation fees) are much higher than those charged by reputable lenders, and are often hidden in fine print.

The lender encourages a borrower to refinance an existing loan into a larger one with a higher interest rate and additional fees.

The lender targets limited-resource neighborhoods that conventional banks may shy away from. Everyone in the neighborhood is charged higher rates to borrow money, regardless of credit history, income or ability to repay.

This occurs when a monthly loan payment is too small to cover even the interest, which gets added to the unpaid balance. It can result in a borrower owing substantially more than the original amount borrowed.

The lender adds language to a loan contract prohibiting a borrower from taking future legal action for fraud or misrepresentation. The only option, then, for an abused borrower is arbitration, which generally puts the borrower at a disadvantage.

While all lenders depend on some form of risk-based pricing — tying interest rates to credit history — predatory lenders abuse the practice by charging very high interest rates to high-risk borrowers who are most likely to default.

Products like credit insurance — which pays off the loan if a homebuyer dies — are added into the cost of a loan when not necessary.

Borrowers are encouraged to borrow more than they should when a lender offers a refinance loan based on their amount of home equity, rather than on their income or ability to repay.

A borrower is convinced to refinance a mortgage with one that has lower payments up front but a large (balloon) payment at the end of the loan term. When the balloon payment cannot be met, the lender helps to refinance again with another high-interest, high-fee loan.

A borrower who sells their home or tries to refinance a home loan with one that offers better terms can be assessed an abusive prepayment penalty for paying off the original loan early. Up to 80 percent of sub-prime mortgages have abnormally high prepayment penalties.