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Avoiding
the Traps of Predatory Lending
The FDIC
openly acknowledges the prevalence of predatory lending in the mortgage
market and encourages borrowers to take precautionary steps to protect
themselves against this growing threat. The following items
outline the bare minimum of points that a consumer must consider when
contemplating acquiring a real estate loan. For more detailed
information, and an excellent overview of how we all can protect
ourselves and our clients from predatory lenders, visit the Federal
Deposit Insurance Corporation.
• Ask
yourself: Do
I really need this loan? Consumers must realize if they are
having money problems they must consider all other options before
putting their home at risk as collateral for a loan.
• Deal with a
reputable lender: Check references and credentials and
don’t allow yourself to be pressured into making a quick decision.
• Shop
around: contact several reputable lenders and educate yourself as
to what is available in the market. Obtaining a minimum of three
quotes is imperative.
• Know what you are
signing: Only sign a document after you fully understand all the
terms of the loan. Realize you have the right to request and
understand key information. Look in the fine print for
overcharges.
• Speak up if you
think you have been treated improperly: Don’t hesitate to seek
help from state or federal government agencies if you cannot resolve
any problems with the lender. And always remember, you do not need to
face a loan problem alone.
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