Mortgage lenders often rely on deceptive advertising to attract subprime borrowers with weak credit histories were able to find clients though a legal but increasingly controversial process of public-record sifting.
Companies referred to as "aggregators" sift through public land records at county and city courthouses, and amass loan information for others that are trying to find consumers who are in bankruptcy, those with home loans and those looking to refinance homes.
These aggregators are getting ready to pounce on adjustable-rate subprime loans issued in 2005 and 2006 whose rates will begin resetting to higher monthly charges late this year.
Information provided by data aggregators forms the base for deceptive ads armed with loan details, unscrupulous mortgage lenders target low-income homeowners with ads that look as if they were issued by the federal government offering benefits under the Community Reinvestment Act. Others use official-looking seals with eagles.
Federal law requires that lenders must, in exchange for access to consumers' loan information, follow through with firm offers of credit. Some lenders often use the information for simple solicitation of business without defining amounts and rates.
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