When to report on predatory lending practices?Answer:
Borrowers should report on lending practices if they encounter them along their way.
The following predatory lending practices need to be reported:
- Aggressive sales techniques to force a borrower into unnecessary refinance.
- If you are a member of minority group and you feel your lender is giving you subprime rates when you in fact qualify for prime rates.
- Loan fees greater than 2% signify predatory lending practices.
- Unnecessary insurance and other premiums rolled into the loan.
- Abusive prepayment penalty (usually on subprime loans).
- Loan flipping, or when you make a cash-out refinance and pay thousands in fees, your mortgage payment is increased, and you get so little cash that the whole transaction makes no sense.
- Read the fine print to make sure you don't sign away your right to sue if you are exposed to harmful lending practices.
Over 30 states have already passed legislation to curb predatory lending practices. Should you ever encounter any, there are local authorities you can report to.
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