Predatory Lending

Buying your home may be one of the most important financial decisions you'll ever make.
Many reputable lenders, appraisers, and real estate professionals are ready to help you
get into the home of your dreams; but every year, home buyers are misinformed and are
taken advantage of.  Often first-time purchasers, seniors and the modest income citizens
become victims of predatory lending or loan fraud.

What is Predatory Lending?

• In communities across America, people are losing their homes and their investments because of predatory lenders, appraisers, mortgage brokers and home improvement contractors who:
• Sell properties for much more than they are worth using false appraisals.
• Coerce borrowers to borrow at high-risk loans such as balloon loans, interest only payments, and or large closing costs.
• Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.
• Knowingly lend more money than a borrower can afford to repay.
• Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
• Charge fees for unnecessary or nonexistent products and services.
• Target vulnerable borrowers to cash-out refinances offers when they know borrowers are in need of cash due to family emergencies.
• Exhausting homeowners' equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.
• Use high pressure sales tactics to sell home improvements and then finance them at high interest rates.

Smart Consumer Tips.

• Research the values of the other homes in the neighborhood. Don't be fooled into paying too much.
• Hire a home inspector who is properly qualified and licensed to carefully inspect the property before you are obligated to buy.
• Research and get a few mortgage rates from reputable lenders. If anyone tries to steer you to just one lender. Be suspicious.
• Never make or allow anyone to persuade you to make false statements on your loan application, such as overstating your income, the source of your down payment, failing to disclose the nature and amount of your debts, or even how long you have been employed. When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete.  Lying on a mortgage application may result in criminal liabilities.
• Never let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property.
• Never sign a blank document or a document containing blanks. It is possible that if someone else inserts in those lines after you have signed, you may still accountable to the terms of the contract.  Either insert "N/A" (i.e., not applicable) or cross through any blanks.
• Read everything carefully and ask questions. Before signing, have your contract and loan agreement reviewed by an attorney skilled in real estate law or a trusted real estate professional.  If you are unable to contact a lawyer or real estate agent, research

If the deal to buy, repair or refinance a house sounds too good to be true, it 
usually is!