In the October 17, 2003 issue of the Real Estate Marketplace, the Fair Housing Center wrote of a growing problem in the mortgage industry today, which is Predatory Lending. The previous article proved some background as to what is being done to address Predatory Lending from a legislatie and Remediation Program within the City of Toledo.
Predatory Lending can occur in any city or community, which is why it is so critically important for the individual to select an ethical mortgage banked to assist with your residential funding request.
Members of the Mortgage Bankers Association of Northwest Ohio do not support Predatory Lending practices and are bound by a Canon of Ethics, whereby MBA members certify compliance with all applicable laws (forbidding Predator Lending) and agree to sound industry practices.
The mortgage process can be confusing which is why we believe it would be helpful to share some warning signs for the Mortgage Bankers Association of America to alert our readers to possible cases of Predator Lending. We invite you to take the Ten Question Test. Don't be alarmed with a "yes" answer to one single question, but if there are several "yes" responses, you may choose to seek guidance from the appropriate state agency.
1. Were you encouraged to include false information on your loan application?
2. Were you asked to leave signature lines or any other important line-item blank? Did the lender or broker alter any information you entered on your loan application?
3. Check your loan file. Are any of the following disclosures missing? Good Faith Estimate; Special Information Booklet, Truth in Lending; HUD 1 Settlement Statement.
4. Have you refinanced your loan several times, and in each instance increased either your monthly payment and/or the total amount you owe on your home?
5. Do your documents reveal that your interest rate calculation will change to require you to pay "daily interest" in instances when your payments are late?
6. Is your loan amount on the loan obtained higher than the value of the home?
7. Did you incur unexpected costs at settlement that were not explained to you prior to the settlement?
8. After the settlement, were you surprised to find that the monthly payments on your mortgage loan were higher than you anticipated based on the initial disclosures?
9. If you have a balloon loan (one in which after a series of low end payments the entire loan balance is due in a large lump sum), will you need to obtain another loan to finance that final lump-sum amount?
10. Were you required to buy credit insurance, insurance that will repay the debt if you die or become disabled? (note: Credit insurance is optional and will not affect your loan decision if you decline to buy it. It can, however, add considerable cost to the loan transaction. You should decide whether you are going to purchase credit insurance carefully).
Members of the Mortgage Bankers Association of Northwest Ohio are your good neighbors in the communities of our region. Our firms are well established and we welcome the opportunity to explain the mortgage process in person to applicants.
If you feed you have been a victim of Predatory Lending contact: State of Ohio/Office of the Attorney General: 614-466-4320 or State of Ohio/Division of Finanace: 614-466-6434.