1. They target you, seeking borrowers that may need cash due to medical issues, unemployment, and debt-related problems. Elderly, Minorities, Immigrants and those with low credit scores.
2. They charge unnecessary costs, especially overpriced insurance, adding in overpriced fixtures, appliances, and even free trips.
3. They give misleading or no information about loans, using bait-and-switch tactics by offering loans that seem almost too good to be true. What they initially offer is often lost in the process, and borrowers may not even realize that the cost or loan terms are not what they originally agreed to. Borrowers have been told that the FHA insures against property defects and loan fraud, neither of which is true.
(excerpted from Mortgage Fraud and Predatory Lending: What Every Agent Should Know, by MARIE SPODEK, GRI, AND JEROME MAYNE (Dearborn))
Predatory lending is a big problem in today’s economy, but know that not all loan officers or mortgage brokers are predatory. I am committed to keeping my friends and clients away from such ... I work closely with only quality lenders, and recommend only those I am confident to hang my reputation with.
For details, please send me an email, changhomes@gmail.com ...I have a guide on avoiding predatory lending as well as referrals to experienced lenders I know and trust.
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