How to Spot Predatory Mortgage Lenders
We like to believe that most people are good-hearted and ethical when conducting business, but there are still unethical business practices that exist who don’t have your best interests in mind. In 2007 we went through a financial crisis caused by the greed in the mortgage industry from bankers, mortgage brokers, and others who were responsible for the mortgage backed securities that led to the system almost collapsing.
Hopefully, you never experience dealing with someone who is taking advantage of you but here is an article today full of tips to prepare you for just in case.
Below is a list of ways to spot and avoid predatory mortgage lenders who may be trying to take advantage of you. They often prey on people who are inexperienced and don’t know an honest lender from a predator.
- The rates and fees appear to be unusually high
- You sense high pressure sales tactics from the lender
- The lender seems like a rehearsed smooth talker or fast talker
- The lender tells you that “bad credit” is not an issue at all
- You are encouraged to lie on your application
- The lender pressures you to accept a risky sounding loan or one that you do not understand nor want
- You can sense that the lender doesn’t care about you but is putting on an act that he/she does
- The lender tries using assurances that the loan being offered will solve all of your financial troubles
- A lender insists that his/her loan is the only one of that type and no other lenders will offer it
- At the closing table, you find that all of your fees and charges are different than what was initially agreed upon for you to pay
If you come across a predatory mortgage lender, please report them to the Federal Trade Commission and/or the state attorney general. You can help put them out of business and save others from being misled into a bad mortgage loan that could hurt their financial future.
It’s important to talk to several lenders to gain experience and get a feel for the lending process. Ask different lenders about the offers being proposed by another lender if you are unsure whether or not you are being ripped off and taken advantage of.
If you’re working with a real estate agent, you can ask them questions as they likely have experience dealing with mortgage lenders and will be able to recommend ethical mortgage brokers and lenders they’ve had clients do business with in the past. Thanks for reading!
Contact Kevin Foy, RE/MAX Excellence Elkhart
Kevin is a real estate broker-associate with RE/MAX Excellence in Elkhart, Indiana and has served real estate clients for over 35+ years in Northern Indiana and Southern Michigan.
To get a hold of Kevin for real estate services:
- Phone: 574-536-9218
- Email: Kevin@TeamFoy.com
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