This article will discuss signs of unlawful practices that you should be aware of to avoid falling victims to predatory mortgage lenders. If you think you’ve been a victim of predatory lending or if you suspect a mortgage lending company of fraud, do not hesitate to report this to the Federal Trade Commission or to your State Attorney General’s office.
Here are the signs of predatory mortgage lenders everyone should watch out for:
Beware of agents that are good at the art of persuasion. Representatives of predatory lending companies are smooth talkers. They are usually overly-friendly, overly nice, and are good at convincing people why you should grab the offer immediately. Also, don’t take an offer especially if the agent persuades that you can afford to pay the monthly mortgage even if you think you can’t. Don’t let anyone talk you into signing up for a deal that you’re uncomfortable with in the first place.
The rates and charges are unreasonably high. This is why it is important for you to shop around for rates first before making a deal with any lending company. If you grab the first offer that you see, you’ll likely be stuck with high rates and fees.
The rates and charges are not clearly presented to you. Always demand a detailed and accurate list of fees that you will be paying in case you agreed to take the loan. If the lending company cannot provide you with exact costs, it’s better to look for another. Many people have fallen for low interest offers only to find out that the â€œprocessing fees’ and “administrative fees” are way too expensive.
It’s now or never. Be especially wary of lending companies that force you to sign up now or else the offers will change. Legitimate lending companies never pressure their clients into signing-up.
Beware of lending companies that promises to grant your loan regardless of your credit score. A legitimate lender is concerned about his own risks and always makes a check on the borrower’s credit history before granting a loan. If a lender doesn’t care about the status of credit, it is very likely that the loan involves high interest rates and expensive costs.
The lending company encourages you to provide false details in your application. Never provide false information in your loan application and never sign any document which has blank lines or spaces. If the lender tolerates any illegal act, it’s a clear sign that you’re dealing with a predatory lender. Back out right away.
At closing, you are made to pay an amount different from what is initially agreed upon. Should this happen, don’t sign any documents. A legitimate lender should not be asking for additional payments without prior notice. As a borrower, don’t forget to ask for a copy of all costs that you will be paying days or at least a week before the closing. To be sure, it is always recommended to have your lawyer present during closing so he can personally check on the legality and the accuracy of the contract.