Predatory Lenders Aren't Always So Easy To Spot! Don't Get Taken Advantage Of. Know What To Look For!
Predatory lenders are all
over the web today. And having bad credit makes you even more vulnerable.
Desperation is one of the things these lenders look for to take advantage of you
with higher interest rates, unnecessary fees and closing costs, and a host of
other unethical (and sometimes illegal) practices.
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.
-
Encourage borrowers who need bad credit mortgage loans 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.
-
Pressure borrowers to accept higher-risk loans such as balloon loans, interest
only payments, and steep pre-payment penalties.
-
Target
vulnerable borrowers (for instance, people who need bad credit mortgage loans) to
use cash-out refinance offers when they know borrowers
are in need of cash due to medical, unemployment or debt problems.
-
"Strip" homeowners' equity from their homes by convincing them to refinance
again and again when there is no benefit to the borrower. The right lender
will
help you to decide which program is best for your situation, regardless of
credit history.
-
Use
high pressure sales tactics to sell home improvements and then finance them at
high interest rates.
What Tactics Do
Predatory Lenders Use?
-
A
lender specializing in bad credit mortgage loans tells you that they are your only chance of getting a loan
or owning a home. You should be able to take your time to shop around and
compare prices and houses.
-
The
house you are buying costs a lot more than other homes in the neighborhood,
but isn't any bigger or better.
-
You
are asked to sign a sales contract or loan documents that are blank or that
contain information which is not true.
-
You
are told that the Federal Housing Administration insurance protects you
against property defects or loan fraud - it does not.
-
The
cost or loan terms at closing are not what you agreed to.
-
You
are told that refinancing can solve your credit or money problems.
-
You
are told that you can only get a good deal on a home improvement if you
finance it with a particular lender.
Remember:
If a deal to buy, repair or refinance a house sounds too good to be true, it
usually is! If someone is asking you to do something illegal (even slightly)
they are a predatory lender and you should not be working with them!
There's a lot of people on the
web offering bad credit mortgage loans. Don't listen to anyone that tries to
make you do something that seems shady or unethical. Remember, they work on
commission and once your deal is done they are on to the next customer leaving
you with a bad loan mess that you'll have to clean up yourself!
The lenders we recommend
are NOT predatory lenders. They subscribe to a strict code of ethics and are
focused on helping you secure a mortgage or refinance that works best for you,
and is legal!
Reprint from www.hud.gov/offices/hsg/sfh/pred/predlend.cfm
