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Predatory Lending Warning Signs
If any of these circumstances describes your situation, your lender or your loan, STOP and get someone to help review your loan and mortgage! Don't let yourself be victimized in a predatory loan situation!
H Targeting minority neighborhoods, especially long-time homeowners.
H Seeking out homeowners who are vulnerable because of medical, credit card, or other consumer debt.
H Frequent, unnecessary refinancings with no benefit to the borrower.
H Basing the amount of the loan on the borrower's equity in the property, rather than on his or her ability to pay.
H Falsifying loan applications, especially the borrower's income level.
H Making a loan for an amount that exceeds the fair market value of the home.
H Financing unnecessary insurance and other products into the loan, drastically increasing its cost.
H Excessive penalties for prepaying the loan.
H Payment schedule includes large "balloon" payment or loans known as "interest only," "non-amortizing" or "partially amortizing."
H Contractors that are linked to the lender are paid for repairs that are poorly constructed or nonexistent.
Do you want to learn more about the predatory lending practices inflicted upon homebuyers and homeowners in Wisconsin? Learn how to identify and prevent this financially devastating abuse.
Start by reviewing
Legal Updates regarding Predatory Lending
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Consumer Resources
One of the best things that REALTORSŪ can do to help prevent predatory lending is to encourage buyers to educate themselves about consumer credit, mortgage loans and homeownership. It is certainly not the role of the
REALTORŪ to provide financial counseling or advice, but encouraging buyers to seek the appropriate financial guidance enhances the possibility of successful transactions and happy buyers.
- Credit & Homeownership Counseling Services
Encourage homebuyers, especially first-time homebuyers and homebuyers with no credit history or a marginal credit standing, to attend credit-counseling classes. Buyers who are educated about the basics of consumer credit and mortgage loans are less likely to be tricked by unscrupulous lenders. They will be more likely to shop around for the lender and the mortgage that best meets their needs. Lists of counseling services in Wisconsin appear at the following links:
- Financial Literacy Information for Consumers
- Home Buying Information for Consumers
- Reverse Mortgages
- Credit Reports and Credit Scores
Encourage buyers to find obtain a copy of their credit report
and find out what their credit score is. Consumers may obtain
their credit reports and credit scores from national credit
reporting agencies. Credit scores are based on an individual's
credit report information and are used to predict whether
consumers will make their payments on time.
The Fair and Accurate Credit Transactions Act (FACT Act) was
signed into law in December 2003. The FACT Act, a revision of
the Fair Credit Reporting Act, allows consumers to get one free
comprehensive disclosure of all of the information in their
credit file from each of the three national credit reporting
agencies once every 12 months through a Central Source:
FTC information about your access to Free Credit Reports
Obtain Free Annual Credit Report
Additional credit reports and credit scores will cost $9.50+.
When these reports are ordered online with a credit card, the
consumer generally will receive the report ordered immediately
and this is by far the method preferred by these companies. Some
of these companies will allow some reports and scores to be
ordered by telephone or mail, which will take longer before you
receive your information.
- Equifax provides credit
reports and credit scores: (800) 685-111
- Experian (formerly TRW) provides credit reports and credit scores: (888)
397-3742
- TransUnion provides credit reports and credit scores: (800)
888-4213
Consumers may request a copy of their TransUnion Personal Credit Reports & Scores by writing to: TransUnion LLC, Consumer Disclosure Center, P.O. Box 1000, Chester, PA 19022
- Consumers can obtain their FICO credit scores and credit reports from
Fair Isaac company
-
NAR/FTC Fair Credit Reporting Act brochure
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Predatory Lending
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Homebuyer Handouts
REALTORSŪ can distribute these handouts to the buyers they work with.
Milwaukee Partnership to Stop
Predatory Lending Practices
The Milwaukee Fair Housing Counsel and its partners have begun an
initiative to identify and eliminate predatory lending practices.
The Strategies to Overcome Predatory Practice (STOPP) coalition
will combat predatory lending by outreach, education, research,
financial options and enforcement in Milwaukee County. Predatory
lending involves practices such as charging borrowers excessive
rates and fees, refinancings with high points and fees, and lender
failure to disclose all financing costs. Borrowers and potential
borrowers may call the coalition's consumer line at 414-278-9190
for advice and help. |
