| There are lending practices that are abusive and | | | | if not eliminate, predatory lending. In fact, borrowers are |
| predatory in nature. How can you identify these? | | | | being made aware that there is a Borrower's Bill of |
| Below are questions that could help you determine | | | | Rights. This gives the borrowers some form of |
| fraud in lending. If you answered "yes" to any of the | | | | protection against predatory lenders. |
| questions, contact the appropriate agency/agencies. | | | | Federal Predatory Lending Laws |
| The information below will help you better determine if | | | | The following are laws now in effect at the Federal |
| you have been a victim of mortgage fraud or | | | | Reserve that gives you rights on certain issues during |
| predatory lending. | | | | the closing process: |
| Have You been a Victim of Mortgage Fraud? | | | | Real Estate Settlement and Procedures Act (RESPA) |
| - Have you been encouraged to falsify certain | | | | This requires disclosure of mortgage processing |
| information on your loan application? | | | | transactions and other fees that could affect the cost |
| - Have you been asked to leave certain signature lines | | | | of settlement services. It is a consumer protection |
| blank on a loan form? | | | | statute, enforced by HUD, that aims to make |
| - Has there been any alteration/s made to the | | | | consumers well-informed in the home buying process. |
| information you supplied in your mortgage loan | | | | Truth in Lending Act (TILA) |
| application? | | | | Enacted under the Consumer Credit Protection Act in |
| Indications of Predatory Lending | | | | 1968, which requires creditors to disclose information to |
| Where you not given a copy of any of the following | | | | consumers in relation to why they are being charged, |
| disclosure agreements? | | | | what for, and how much. |
| - Good Faith Estimate | | | | State Predatory Lending laws |
| - Special Information Booklet | | | | Predatory lending laws can vary from state to state. |
| - Truth in Lending | | | | Know the laws in your area that protects consumers |
| - HUD-1 Settlement Statement | | | | against abusive lending practices like excessive fees |
| - Have you refinanced your mortgage several times? | | | | and rates. High fees may compromise pre-payment |
| In each instance, has your monthly mortgage payment | | | | penalties and credit life insurance. |
| and/or total amount owed increased? | | | | List of fraudulent home loan modification practices |
| - Do any of your mortgage documents say that when | | | | Desperate home owners would potentially jump to |
| your payments are late, your interest rate will change | | | | every opportunity to get a mortgage modification to |
| to accommodate "daily interest" that you need to pay? | | | | avoid being kicked-out of their homes. It is not |
| - If you want to pay off or refinance your loan, are | | | | surprising, that over-promising practices will start to |
| there any pre-payment penalties indicated? | | | | occur and loan modification companies will take |
| - Is your loan amount higher than your home's value? | | | | advantage of homeowner's vulnerability. |
| - Do you have any unexpected costs in your | | | | Your Guide To Detecting Loan Modification Fraud |
| settlement that were not discussed with you prior to | | | | - The "high-pressure, cash-up-front" type of sales |
| the settlement? | | | | business tactics. Be suspicious of pushy salesman and |
| - After the settlement, did you find your monthly | | | | mortgage modification companies that require up front |
| mortgage payments to be higher than you anticipated | | | | fees.. |
| based on the initial disclosures? | | | | - Never pay a fee for housing counseling services. |
| - After making a series of low payments to your loan, | | | | - Never sign anything. Unless you are working directly |
| there is still a large lump sum or "balloon payment" due | | | | with your mortgage company, do not sign anything, |
| to your entire loan balance. Will you need to refinance | | | | such as, a transfer of deed. |
| thru another loan to pay that lump-sum? | | | | - Never submit mortgage payments other than to your |
| - Were you encouraged or required to get credit life | | | | mortgage company. |
| insurance? Insurance that will repay the debt in the | | | | Be alert. Remember that the official place to go for |
| event of a death or disability. | | | | mortgage modification services is the governments |
| Note: Credit insurance is optional and should not be | | | | Making Home Affordable website. You can find |
| imposed to borrowers. You must decide carefully | | | | information related to the mortgage modification |
| whether you are going to purchase credit insurance | | | | process. In reality, fraud does not only occur in |
| because it considerably affects the cost of the loan | | | | mortgage modifications. Oftentimes, it starts from the |
| transaction. | | | | moment a borrower shops for a loan. |
| MBA and its fellow supporters actively fight to control, | | | | |