Beware of predatory lenders

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The Wisconsin Department of Agriculture, Trade and Consumer Protection cautions farmers against predatory loan companies that are taking advantage of the current economic situation. These predatory loan companies have been contacting farmers by phone or letter. Some companies also have Web sites or ads with loan information. To avoid falling into a predatory lending trap, review all non-standard loan offerings with a neutral party.

Use these clues to identify loan offers that may be too good to be true:

  • Charges for a loan finder who supposedly arranges the contact.
  • Unreasonably high interest rates.
  • High closing costs or origination fees.
  • High appraisal fee or an appraiser chosen by the loan company.
  • Short loan maturity time.
  • A lender not regulated by the government.
  • A loan originating from a distant state.
  • An offer of cash in exchange for an ownership interest in the farm.
  • Pressure to close the transaction quickly or threats that the loan won’t be available for long.

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