Ten Warning Signs of Abusive / Predatory Lending

The questions below are a good way for you to know if someone could be misleading you about a loan and its costs to you. Just because you answer "yes" to any these questions does not mean you are or have been a victim of predatory lending. But, if you answer "yes" to some of the questions, we recommend you contact the appropriate state agency or housing / credit counselor for more information and guidance.

1. Were you encouraged to include false information on your loan application? 6. Is your loan amount on the loan you obtained higher than the value of the home?
2. 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? 7. Did you incur any unexpected costs at settlement that were not explained to you prior to the settlement?

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

8. 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?
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? 9. If you have a balloon loan (one in which after a series of low pay-ments 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?
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? 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 pur-chase credit insurance carefully.).

source: www.stopmortgagefraud.com

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