Questionable lending practices can be as simple as padding with unnecessary mortgage loan fees or as complicated as surprise balloon payments, in which you're switched to a higher interest rate after some years without being told, or unknowingly moved into an adjustable-rate mortgage from a fixed-rate.

"It's definitely on the increase," said Ryker Wada, an attorney with the Legal Aid Society of Hawai'i. The victims of such scams are often society's most vulnerable members: those with poor credit; the elderly; inexperienced, non-English speakers; and immigrants.

One warning sign: a lender or mortgage broker who aggressively contacts you, even door-to-door, for loans, said George Zweibel, a consumer attorney on the Big Island and former Federal Trade Commission specialist on predatory lending.

Other predatory lending tactics include the following:

• "Flipping." A homeowner is persuaded by the lender or broker to keep refinancing unnecessarily — and pay high fees each time without getting the promised benefits.
• "Packing." Getting assessed "junk" fees that vary by lender, such as application or appraisal review fees.
• Inflated fees. Costs are padded, as when a $400 appraisal is assessed at $700 by the lender.
• Bait and switch. What's promised isn't what's delivered.
• Balloon payments. Borrowers are given a low-interest or fixed-rate mortgage but aren't aware that the rate is good only for a few years. They're switched to a much higher or adjustable rate later on. The consumer isn't told the first rate doesn't last, leaving the fact buried in loan documents.
• Asset-based lending. The lender or broker tries to get as much money up front from the borrower as it can. Zweibel has seen borrowers assessed 7 points on their loan plus exorbitant fees. For instance, getting a $100,000 loan could incur $10,000 in fees and points.

To avoid being victimized, read through the loan documents. If you need some time to go through it, you have the right to request a copy of the closing statement 24 hours before the signing.

Compare the loan with those offered by other lenders. If it looks much cheaper than others, be wary, Zweibel said.

Ask for a good-faith estimate on costs. If they won't provide it, walk away. If they do, compare the fees with those of two other lenders.

For each loan, compare the annual percentage rate, or APR, which tells you the total yearly cost.

Ask whether the monthly payments will change and whether there's a prepayment penalty.

Make sure you can afford the loan.

A good rule is for mortgage costs to take up a third of your gross income, Zweibel said.

Don't sign mortgage papers if they contain blanks, and make sure to get a copy of each document you sign.

Under federal law, you can change your mind for any reason within three days of signing a contract in which your home serves as security, according to the American Bankers Association.

Check for any complaints against the lender or broker with the Better Business Bureau of Hawaii at www.hawaii.bbb.org. Nationally, go to the Web site for the BBB at www.bbb.org.

Once you get the loan, pay attention to your statements. Zweibel said one lender quietly charged a borrower $2,135 a year for hurricane insurance even if the homeowner could prove she already had coverage, which she bought at $170 annually. She could not afford the extra cost, and the lender threatened to foreclose, until Zweibel sent the company a letter.

For free advice, the Legal Aid Society of Hawai'i at 536-4302. For complaints, call the state Department of Commerce and Consumer Affairs at 587-3222. The Federal Trade Commission has consumer counselors as well at (877) 382-4357.