When shopping for a mortgage loan, homebuyers need to be aware of predatory lending practices. These unscrupulous activities can increase the cost of homeownership and rob the borrower of equity in the home. Many predatory practices are illegal.
Predatory lenders may mislead the borrower about the true cost of a mortgage loan, fail to provide legally required disclosure documents or add unexpected, unnecessary and excessive costs at settlement.
Unethical lenders may involve borrowers in mortgage fraud by asking the borrower to provide false information on the loan application or leave important line items blank on the application.. Fraud can also involve inflated home appraisals and the misuse of mortgage funds.
The best protection against predatory lending and mortgage fraud is to shop around for a mortgage loan. Ask questions and get explanations so that you have a complete understanding of the loan. Be sure you know the total borrowing cost over the life of the loan.
Fannie Mae works to promote responsible lending and combat predatory lending and mortgage fraud. We want people to buy homes they can afford over the long term. We do this by:
- Offering home mortgage products through lenders that make home buying affordable and sustainable for borrowers.
- Supporting homebuyer education and counseling. Counselors and other housing professionals use our free Home Counselor Online™ tool as a resource to help consumers prepare for, apply for and receive home loans — as well as provide the post-purchase support necessary to remain successful homeowners.
- Providing consumers with home-buying information through Fannie Mae’s Resource Center at 1-800-7FANNIE (732-6643).
High-pressure sales tactics, including pressure to act quickly, can be signs of predatory lending. Deals that appear to be too good to be true generally are just that — too good to be true.
We’re always glad to answer any questions…. Have a great day!
Michelle Castle provides mortgage loans to all of North Texas and Southern Oklahoma. Call Michelle Castle at (903) 892-1998 if you are looking for a home loan in North Texas and Southern Oklahoma.