Warning Signs You Need To Know

With all the hidden agendas, secret rebates and undisclosed profit in the lending industry, its difficult for a homebuyer or homeowner to know if they are being led down the garden path.

Predatory lending and mortgage fraud are joint concerns for both the industry and the borrowing public and this article is meant to assist the reader in identifying predator lending behavior in the hopes it will help you avoid getting caught in this type of arrangement.

The 9 questions found below is a good test to see if you might be involved with a predatory lender/banker/mortgage broker:

1. Where you asked to lie on your loan application?

2. Where you asked to leave anything blank (like income, asset and or signature sections)?

3. Did your lender/banker/mortgage broker change anything on your loan application?

4. Are you missing any of the following information:

- Good Faith Estimate (known as a GFE) - Truth In Lending Statement (known as a TIL)

- HUD-1 Settlement Book

- Special Information Booklet

5. Have you refinanced your mortgage with the same lender and if so, have your mortgage payments gone up each time?

6. Do the interest rate calculations on your loan documentation reflect the need for you to pay a daily interest penalty in the event of late payment?

7. Is the loan amount you requested worth more then the property in which you are financing?

8. Did you incur any unexpected/unplanned costs at settlement that were not thoroughly discussed prior to closing your mortgage loan?

9. Did you find that your mortgage payment was higher after closing then what was originally reflected in your original disclosures and estimates?

Bear in mind that just because you answered yes to one or more of the above questions, this doesnt necessarily mean that have a clear cut case of predatory lending---if you have answered yes to any of the above questions, you should seek guidance with your local Banking Commission.

What You Can Do If You Think You Are A Victim

1.) If you are refinancing your mortgage loan, the 3 day rescission period will save you from accepting any last minute changes.

2.) Write a formal complaint to your servicing lender.

3.) File a complaint with HUD.

4.) File a complaint with the governing body that regulates the predatory lender:

- For national banks, contact www.occ.treas.gov/customer.htm

- For federally chartered banks and S&Ls, contact http://www.ots.treas.gov/docs/7/777007.html

- For mortgage banking firms, contact www.aarmr.org/lists/members-IE.html

5.) File a complaint with your states attorney general and/or Consumer Protection Division.

Buyer Beware is advice that bodes well in every situation that includes an exchange of money---you need to know the signs in order to avoid being a victim of them.

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H. Scott Miller is a National Residential Upfront Mortgage Lending Professional offering an open-book lending experience meant to provide his clients with pricing transparency, access to wholesale pricing and the benefit of his council on which loan offers the greatest benefit/lowest cost of borrowing.

For more information on how upfront lending can save you thousands in unneeded junk fees, higher interest rates and mortgage payments, visit The Mortgage Inner Circle.

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