Protect Yourself from Predatory Lenders

Dec 4th, 2007 @ 7:03 PM by MortgageMentor

You hear a lot on the news these days about “predatory” lenders. Those are the lenders who use deceitful practices in order to cause people to lose their homes or their investment properties. They do things like:

• Ask borrowers to lie on the application. This could be a misrepresentation of their income, expenses, or even the amount of money they have for a down payment.
• Lend money knowing that the borrower is not able to repay it.
• Charge fees for nonexistent services or products
• Charge high interest rates that are not based on credit history like other lenders’ fee scale.
• Push borrowers to choose high-risk loans.
• Encourage homeowners to lose equity by refinancing often or repeatedly.

Someone else on this board said you’d have to be deaf, dumb, and blind not to know that you have a 3-day right of recission when you obtain a mortgage. Since I’m closing on my own refi tomorrow, I think I am well qualified to say “amen to that!” The lender has made several separate phone calls, each time reminding me that there is a 3-day right of recission.

If you are refinancing a home, protect yourself by refusing to sign blank or false loan documents. Beware of lenders who pressure you in any way, and if the loan terms at closing are not what you expected, take advantage of the 3-day right of rescission. But most of all, educate yourself about house BEFORE you sign anything. For more information, call HUD at 800-569-4287 or visit http://www.hud.gov.

One Response to “Protect Yourself from Predatory Lenders”

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