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Red Flags of Predatory Lending Red
Flags of Predatory Lending
A.
Recommending that you apply for more money than you need and that you accept
larger monthly payments than you think you can afford. Just because your
income to expense ratio shows you should be able to afford “X” amount of
dollars does not mean that you can, based on your living habits. B.
Suggesting that you gloss over or falsify even the smallest bit of
information on the loan application. That could well be considered fraud on
your part and you need to be aware of the possible consequences. C.
Misrepresenting the kind of loan you are getting, for example calling a one
time fixed rate loan a “Line of Credit”, or some other kind of loan that is
not what you want. D.
Promising one set of loan terms when you apply, then giving you a different
set of terms at the closing. This is a big one and seen very often when out
of state, or Internet lenders are offering the products. It is always better
to work with a local, reputable lender. E.
Encouraging you to sign forms that fail to disclose important loan terms such
as interest rate, fees, payment amounts, balloon payments, or pre-payment
penalties. Predatory
lenders will most often contact their victims through cold calls, either
phone or direct mail, or referred by some disreputable home repair scam
trying to get you to borrow funds to pay for their repairs. It is not a wise
decision to make major financial commitments based on unsolicited phone calls
or sales literature from an unknown company. It
is wise to contact two to three local lenders when you feel the need to
secure a loan, either for the purchase of your dream home, or to remodel or
add to your existing residence. As
I stated in my previous “Title Tip” regarding predatory lending,” If it
sounds too good to be true, It likely is.” Any
questions can be directed to Benchmark Title at 618-239-3750. Please feel
free to call or email:
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Contact us today for a quote! Why wait? You can place your
next title order now by clicking here. |
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