Sunday, December 04, 2005

Predatory Lending Practices

Consumer Tips to Avoid Predatory Lenders

The National Associaton of Mortgage Brokers (NAMB) has been working to raise the awareness of fraudulant mortgage lending practices for years. The following tips are on the National Association of Mortgage Brokers web site.

1. Walk away from anyone suggesting that you lie on your mortgage application(e.g., encouraging you to inflate your income, exaggerate your work history, ect.)

2. Don't sign blank mortgage documents or any that are incomplete.

3. Don't borrow more than you can afford and beware of those who try to get you to borrow more.

4. Beware of door-to-door salesmen, telemarketers, or internet ads. These are scam artists' favorite sales techniques.

5. Don't give in to high-pressure salesmen. No reputable broker or lender will try to pressure you to take out a loan.

6. Don't use lenders who want you to refinance your mortgage over and over again in a short period of time (charging you higher fees, interest rates, and prepayment penalties each time).

7. Be sure you know the terms of the loan. Loans with low monthly payments probably include a balloon payment - i.e., the remaining principal must be paid in full at the end of the loan term.

8. Beware of lenders who charge excessive fees and prepayment penalties. Predatory lenders often charge hidden fees.

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8:43 PM  

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