Help protect yourself by being aware of activities that might indicate a predatory lending practice.
Here are some tips from the NAR brochure "Are You Having Trouble Paying Your Mortgage?"
~~Excessive service fees. Lender fees of 1 percent are common on many mortgages — significantly higher percentages may be a red flag.
~~Teaser rates and balloon payments. Borrowers must understand what their payments will be when the rate is raised.
~~Delayed closing. Unscrupulous lenders may delay a closing so that a more favorable loan rates expires.
~~Overinflated appraisals. Higher values allow for higher fees to the lender and added cost to the borrower.
~~Prepayment penalties and other barriers to refinancing. Penalties for prepayment try to make it too costly for borrowers to get another loan at a more favorable rate.
~~Unexpected settlement costs that make the fees charged at closing significantly higher than those disclosed earlier.
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