The public’s inability to identify predatory lenders is part of the current housing crisis. Unfortunately, people took loans from unscrupulous individuals who didn’t care what happened to them. It is why so many people are losing their homes now. However, there is a way for everyone to avoid being in this type of situation in the future. Below are ten tips that will help anyone identify a predatory lender. They are ones the US Department of Housing and Urban Development discusses on their Website.
- The details of your loan are vague. Even when you ask the loan officer for more information, they skirt the question. They never give you a straight answer.
- Your loan papers have blanks on them. It’s time to sign your loan papers, but all of the terms and information isn’t completed on the forms. The loan officer is tells you that he or she will fill everything in as stated later on.
- You’re being asked to lie on your loan papers. The loan officer is telling you it’s necessary for you to get your new house. It’s just a little white lie and won’t mean anything.
- The loan amount is out of your income range. Other banks have turned you down for this amount or quoted you a much lower one. However, this new bank says it’s no problem.
- You are suddenly getting charged for extra fees. These fees are ones for services that you’ve never received on the property. Or, they are ones that normally aren’t a part of a sale of a home.
- The housing inspector and other professionals aren’t licensed. They actually have to work through another licensed party that you’ve never met to facilitate your loan. They try to convince you that it’s okay.
- The price of the home is much higher than surrounding ones. However, the quality of the home is the same. The real estate agent can’t really give you a concrete reason as to why.
- You are receiving intense pressure from the lender to sign the loan. They say it’s because they really want you to have the house. However, you are suspicious.
- The loan you are being offered is a high risk one (balloon loans, interest only, steep prepayments). It is not conventional and can create a financial crisis if you miss a payment.
- The lender, mortgage broker, appraiser or contractor has a bad reputation in the area. They say they’ve changed or the rumors are lies. Yet, you are unsure.
Being wary of these ten things will help you avoid being taken advantage of by a predatory lender. You can also check out https://hub.docker.com/r/legalguides/lending if you want to ensure utmost safety and security. For more information, visit the Website ran by HUD. Knowledge is power and will help you avoid being scammed.
