Equity stripping involves reducing the equity in a property through refinancing or obtaining additional loans, typically used as a tactic to avoid asset seizure in cases of financial distress or by predatory lenders.
Flipping a loan involves repeatedly refinancing an existing mortgage, often luring the borrower with seemingly better interest rates while charging substantial fees for the new loan and prepayment penalties for the old loan. This predatory lending practice can lead to excessive debt and ultimately default and foreclosure for the borrower.
Predatory lending refers to unfair, deceptive, or fraudulent practices of some lenders during the loan origination process. These practices take advantage of borrowers' lack of knowledge and often result in borrowers being burdened with loans they cannot afford, high interest rates, and excessive fees.
