Resources — Credit and 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. Find Wisconsin counseling services below:
Financial Literacy Information for Consumers
Resources — Homebuying
Resources — Credit Reports and Credit Scores
Buyers should be encouraged to find out their credit score and obtain a copy of their credit report from a national credit reporting agency. 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.
Additional credit reports and scores cost $9.50. When these reports are ordered online with a credit card, the consumer generally will receive the report immediately; this is the method preferred by these companies. Some will allow some reports and scores to be ordered by telephone or mail, which will take longer before receiving the desired 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 www.myfico.com.
Resources — Predatory Lending
Predatory lending warning signs
- Targeting minority neighborhoods, especially long-time homeowners.
- Seeking out homeowners who are vulnerable because of medical, credit card or other consumer debt.
- Frequent, unnecessary refinancing with no benefit to the borrower.
- Basing the amount of the loan on the borrower's equity in the property, rather than on his or her ability to pay.
- Falsifying loan applications, especially the borrower's income level.
- Making a loan for an amount that exceeds the fair market value of the home.
- Financing unnecessary insurance and other products into the loan drastically increasing its cost.
- Excessive penalties for prepaying the loan.
- Payment schedule includes large "balloon" payment or loans known as "interest only," "non-amortizing" or "partially amortizing."
- Contractors who are linked to the lender are paid for repairs that are poorly constructed or non-existent.
If any of these circumstances describes your situation, your lender or your loan, stop and find someone to help review your loan and mortgage. Don't let yourself be victimized into a predatory loan situation.
REALTORS® 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.