As more people face financial hardships due to the credit crunch, predatory mortgage companies are experiencing a business boom. Preying on the fear that people have over losing their homes, or embarrassment that others have over less than perfect credit, predatory mortgage companies sign people up for mortgages that they cannot hope to repay, or collect outrageous fees and then disappear.

A predatory mortgage company can encompass a wide variety of businesses. Some predatory mortgage companies have no plans to offer mortgages at all; they collect fees up front only to inform you that you have not been approved for the loan. Other predatory mortgage companies offer mortgages, but the terms are so onerous that the mortgage can destroy a family's financial stability. Predatory lenders are often difficult to prosecute, because the borrower has signed a contract agreeing to the terms.

If you know what to look for, it is possible to avoid predatory mortgage companies.

What if, despite your best efforts, you are the victim of predatory lending? After you sign a loan document, it is not final. You have three days to back out of the contract for any reason, or no reason at all. Contact the lender in writing and let them know that you want to be released from the contract. If it has been longer than three days, contact your state's Attorney General. This office is in charge of consumer protection, and they can help you pursue actions against the lending company.