Predatory Lending comes in different forms and has numerous tentacles. A classic form involves the purchase or refinance of a home. But the incidence of predatory lending can also occur in the context of an auto or other motorized vehicle loan, a student loan, lease of rental premises or any large scale financing where the lender overreaches to a borrower who simply cannot afford the loan. Recent action and media attention to predatory lending in the mortgage industry has hit "sub-prime" lenders hard, and has called much needed attention to this devastating practice. Certain federal and state laws may be used to seek redress of predatory lending practices in its various forms.

One common "red flag" that indicates a predatory loan is an appraisal that is far above the true price for the property. An over-appraisal of a property can lead to the alleged justification for a grossly inflated loan amount and the consummation of a loan that either the consumer simply cannot afford, or one that is a grossly unfair windfall to the lender and/or mortgage broker. Other red-flags include: newly constructed housing developments with home sales for little money down; multiple mortgage refinances with high fees; home repair schemes involving mortgage refinancing; mortgage financing of debt consolidation; high-cost and high fee loans, credit life and/or disability insurance sold with the mortgage; fees paid to an unknown mortgage broker; "stated income" or "no documentation" loans where the loan was not based on a consumer's income or ability to repay; and undisclosed or excessive charges for title insurance.

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