Flipping is the repeated refinancing of a predatory loan; that is, making multiple loans to the same homeowner. High fees and points (one point equals one percent of the loan amount) are charged each time. Predatory lenders often encourage borrowers to refinance an existing loan into a larger, longer-term loan, often at a higher interest rate. Borrowers receive minimal, if any, net proceeds when they refinance and, over time, their home equity is eroded by excessively high loan costs. Some states limit the dollar amount that can be refinanced to protect the borrower.
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