| Home > Consumer Information > Mortgages/Predatory Lending > Predatory Lending Warning Signs |
| Predatory Lending Warning Signs |
| If you've recently closed or are
about to complete a home loan that is not at a prime lending rate, or comes
with significant points and fees, you should ask yourself these checklist of
questions to protect yourself from entering into a potentially predatory loan. |
| Do you believe there was general
deception on the part of Loan Officers and/or closing representatives on behalf
of the lender/broker? |
|
Yes |
No |
| Were you encouraged to include
false information on your loan application? |
|
Yes |
No |
| Were you asked to leave signature
lines or any other important line-item of any form blank? Did the lender or
broker alter any information you entered on your loan application? |
|
Yes |
No |
| Did the lender charge excessive points at closing, have a significant
range of fees on Good Faith Estimate ("GFE"),
or change of loan terms? |
|
Yes |
No |
| Did the GFE contain a range of
costs so large that it failed to provide you with a fair estimate of cost
you face at settlement? |
|
Yes |
No |
| Did the lender not supply you
with all necessary disclosures (i.e., Good Faith Estimate, Truth-In-Lending, HUD-1 Uniform Settlement statement) prior
to closing? |
|
Yes |
No |
| Were you unaware of placement
of mortgage life insurance on the loan? |
|
Yes |
No |
| 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? |
|
Yes |
No |
| Is your loan amount on the loan
you obtained higher than the value of the home? |
|
Yes |
No |
| Did the loan have you pay points
that did not buy down interest rate? |
|
Yes |
No |
| Did the new loan
flip a relatively recent loan? |
|
Yes |
No |
| Did the loan provide you with
no tangible net benefit? |
|
Yes |
No |
| Did the lender fail to disclose
or verbally misrepresent pre-payment penalties and other fees until closing? |
|
Yes |
No |
| Did the loan officer verbally
misrepresent a prepayment policy? |
|
Yes |
No |
| Did the lender not supply document
copies at closing for use during 3-day right of rescission period? |
|
Yes |
No |
| Did the lender use various "bait
and switch" scenarios? |
|
Yes |
No |
| Did the lender delay the loan
closing to purposely have lock-in/commitment
deadlines expire so that the interest rates rise? |
|
Yes |
No |
| Are there fee discrepancies on
original disclosures versus revised disclosures given at closing? |
|
Yes |
No |
| Are mortgage commitments and Lock-in Agreements not being honored by the lender? |
|
Yes |
No |
| Did the lender misrepresent the
terms of a bi-weekly mortgage payment program? |
|
Yes |
No |
| After settlement, were you surprised
to find that the monthly payments on your mortgage loan were higher than you
anticipated based on the initial disclosures? |
|
Yes |
No |
| If you have a balloon
mortgage, will you need to obtain another loan to finance that final lump-sum
amount? |
|
Yes |
No |
Were you a victim of a lender
and contractor second mortgage home improvement
scam (lender and contractor take money - consumer gets no work done on
home - classic predatory loan scheme)? |
|
Yes |
No |
| If you answered "yes"
to any of these questions, you may be or have been a victim of a predatory home
loan. |
For assistance, contact the Department. |
