Beware of predatory lenders
Dairy Herd news source
| Monday, June 22, 2009
The Wisconsin Department of Agriculture, Trade and Consumer Protection cautions farmers against predatory loan companies that are taking advantage of the current economic situation to the detriment of farmers.
"As farmers find it increasingly difficult to obtain loans, the Wisconsin Farm Center is aware that companies are seeking to prey on cash-strapped farmers in Wisconsin," explains Wisconsin Agriculture Secretary Rod Nilsestuen.
In one situation in southern Wisconsin, a farmer was charged $2,500 for the loan proposal. The group would loan him 60 percent of the appraised value of the farm real estate and 50 percent of the appraised value of his personal property. On top of the loan proposal fee, the group would charge the farmer $18,000 in closing costs, 12 percent interest on the loans, and a balloon payment due in two years. The farmer would also be billed an undisclosed amount for the appraiser who was chosen by the group.
"We are concerned that in cases such as this, the farmers could be left with nothing," said Paul Dietmann, director of the Wisconsin Farm Center. "There is little chance that these farmers will end up owning their farms at the conclusion of these deals, and the companies would own the farm for 60 cents on the dollar."
Click here for ways to identify loans that are too good to be true.
Source: Wisconsin Department of Agriculture, Trade and Consumer Protection
