In communities across the United States, people are losing their homes because of predatory lenders, appraisers, and mortgage brokers.
Unfortunately, predatory lenders do not have horns and tails. They will seem like nice, friendly, helpful people. They’re trained to gain your trust. So, how will you know one?
1. None of your questions get answered. Or the answers don’t really make sense. A good lender can explain your loan in everyday language.
2. They pressure you to sign things before you’re ready or rush you through the paperwork. Read everything carefully; do not sign anything that you don’t understand. A good lender won’t pressure you.
3. They don’t explain or tell you about all the costs for getting a loan. A good lender will explain the costs and the services you’re getting.
4. Things change at the closing. You’re not getting the loan you were promised. Walk away. A good lender will honor their commitments.
5. They want you to borrow more money than you need. Do not 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. A good lender will let you decide how much money you borrow.
6. They make you feel like you don’t have other choices, as if other lenders won’t give you a loan. A good lender will let you know you have options.
7. They give you a quick yes, but it may not be the best loan for you. A good lender will take time to explore your options with you.
8. You have a feeling something is just not right. Listen to your instincts. A good lender makes you feel informed and confident.
Don’t let a predatory lender pressure you into a costly loan. Here’s some additional tips for being a smart consumer:
1. Do not let anyone persuade you to make a false statement on your loan application such as overstating your income, the source of your downpayment, failing to disclose the nature and amount of your debts, or even how long you’ve been employee. When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete. Lying on a mortgage application is fraud and may result in criminal penalties.
2. Never sign a blank document or a document containing blanks. If information is inserted by someone else after you’ve signed, you may still be bound to the terms of the contract. Insert “N/A” (not applicable) or cross through any blanks.
3. Be honest about your intention to occupy the house. Stating that you plan to live there when, in fact, you’re not (because you intend to rent the house to someone else) violates federal law and is a crime.
Remember – if a deal to buy or refinance a house sounds too good to be true, it usually is!
Kimberly Van Hal, REALTOR®