Mortgage Loans The Top Predatory Red Flags

Mortgage Loans The Top Predatory Red Flags



Mortgage Loans - the​ Top Predatory Red Flags
The sub prime market for home mortgages is​ a​ hot bed of​ predatory practices .​
These types of​ lenders prey on​ the​ elderly,​ borrowers with poor credit who have few options,​ and less educated and non English speaking customers .​
They give the​ entire industry in​ general and other good sub prime lenders more specifically a​ bad name.
A Perfect Storm of​ lax oversight,​ a​ down market,​ and hungry investors makes the​ perfect environment for predatory lending practices .​
And there are plenty of​ takers thanks to​ the​ aggressive marketing practices of​ some lenders.
Here are some of​ the​ top red flag warning signs for these lenders.
1.MONEY UPFRONT--Definitely a​ no-no .​
If someone asks for money upfront RUN don't walk out the​ door .​
Know the​ difference between this and a​ legitimate application fee.
2.ARM'S--Beware if​ an​ Adjustable Rate Mortgage is​ the​ only option offered.
3.BALLOON PAYMENT--Balloon's are for small kids not homeowners .​
They are too risky especially for Sub Prime Borrowers.
4.TOO BIG a​ LOAN--Be wary of​ a​ lender is​ trying to​ sell you​ on​ a​ loan that is​ bigger than you​ need.
5.HIGH INTEREST RATE--If the​ rate seems too high like more than 5 points over prime-keep shopping.
6.FREE VACATIONS--If the​ loan is​ a​ good one,​ you​ should need no incentive to​ take it .​
Only when it​ is​ questionable might there be a​ vacation thrown in​ for you​ to​ do the​ deal.
7 .​
PRESSURE TACTICS--Any kind of​ pressure is​ a​ bad sign .​
For example to​ sign papers now,​ sign blank papers or​ to​ falsify an​ application are all cases where you​ need to​ leave and find another lender.
8.ASSET ORIENTED LENDER--If the​ lender is​ more interested in​ the​ house as​ an​ asset than where the​ money is​ coming from to​ pay the​ mortgage he is​ more than likely looking for a​ foreclosure more than making a​ loan.
These are some of​ the​ top red flag warning signs of​ a​ predatory loan/lender .​
There are others to​ be sure .​
For sub prime borrowers,​ the​ market is​ rife with predators looking for an​ easy mark .​
Don't be their next victim.
For more information on​ Mortgages and Home Equity click the​ links below.
Jack Krohn is​ a​ leading free lance writer on​ Home Equity and Mortgage issues with over 35 articles to​ his credit .​
He is​ also the​ #1 author of​ Home Security Articles in​ the​ country according to​ Ezine Articles.




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