Loan Flipping
A predatory lending practice in which a lender repeatedly refinances a borrower's loan, generating fees each time while providing minimal financial benefit to the borrower.
Also known as: predatory refinancing, serial refinancing fraud, mortgage flipping
Last reviewed: 1 June 2026
Loan flipping is a form of predatory lending in which a borrower is repeatedly persuaded to refinance an existing loan — often a home equity or mortgage product — with a new loan from the same or affiliated lender. Each refinancing generates origination fees, points, and other charges that are rolled into the new loan balance, steadily eroding the borrower's equity while providing little or no benefit in terms of interest rate or payment reduction.
Lenders engaged in loan flipping may aggressively solicit existing customers with offers of cash or lower payments that obscure the long-term cost. Vulnerable borrowers — older homeowners with substantial equity, those with poor financial literacy, or those in financial distress — are disproportionately targeted.
Over multiple flips, a borrower who started with significant home equity may find themselves deeply underwater. Loan flipping can cross the line from predatory practice into outright fraud when lenders misrepresent the terms, forge signatures, or falsify income documentation to facilitate approvals.
Examples
- An elderly homeowner is contacted by their lender four times in three years about refinancing opportunities; each refinance generates substantial fees rolled into the balance, and after three years the homeowner has less equity than when they started despite making all payments.