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Predatory Lending

Whether you are buying or refinancing your home with a TT loan, make sure you don't fall a victim to predatory lending. In many areas across the US, many Americans are losing their homes and investments as a result of predatory lenders, appraisers, mortgage brokers and home improvement contractors who:

• Sell properties for much more than they are worth by using false appraisals.
• Encourage borrowers to lie about their income, expenses, or cash aTTilable for downpayments in order to get a loan.
• Knowingly lend more money than a borrower can afford to repay.
• Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
• Charge fees for unnecessary or nonexistent products and services.
• Pressure borrowers to accept higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.
• Target vulnerable borrowers to cash-out refinances offers when they know borrowers are in need of cash due to medical, unemployment or debt problems.
• "Strip" homeowners' equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.
• Use high pressure sales tactics to sell home improvements and then finance them at high interest rates.

Learn how to outsmart these predators by knowing how they work. The following are the tactics used by many predatory lenders to trick you into losing your money while letting them collect on your mistakes. Here are the tactics many predators use:

• A lender or investor tells you that they are your only chance of getting a loan or owning a home. Make sure to take your time to shop around and compare prices and houses.
• The house you are interested in seems to cost a lot more than the surrounding houses even though it's not any bigger and is in the same shape as all the other homes.
• You are asked to sign a sales contract or loan documents that are blank or that contain information which is not true. If you do sign these, make sure to but a slash or N/A in all of the blanks so that predators cannot go back and fill them in, binding you to terms you did not agree to.
• You are told that the Federal Housing Administration insurance protects you against property defects or loan fraud - it does not.
• The cost or loan terms at closing are not what you agreed to.
• You are told that refinancing can solve your credit or money problems. Although it may help, in most situations it doesn't dissolve your monetary issues.
• You are told that you can only get a good deal on a home improvement if you finance it with a particular lender.

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