Equity grabbing is a predatory lending technique used to gain peoples homes. With cash-out refinance, people with a lot of equity in their homes (own most of their homes, since they paid out most of the mortgage) can get a bigger loan than they had originally, meaning they will get cash against the equity in their home. They can spend this cash the way they want, however, they will have to pay it back over time, at a higher interest rate.

Interest rates do not differ from those on the market, but this where the catch is. Predatory lenders talk borrowers into cash out refinance without specifying overly high interest rates. Once people sign up for the loan, they do not suspect anything, until time to pay back comes, at 14-20% interest rate. As many people simply cannot afford it, they default on the mortgage (cannot pay it back) which leads to foreclosure (lender taking borrowers property as per contract). In the end people are left without their homes.