Most mortgage lenders are honest, and they provide consumers with an important service. However, there are some lenders who look for uninformed or inexperienced home buyers so that they can take advantage of them. These predatory lenders are only out to make a quick buck — and they don’t care what kind of economic and emotional damage they leave in their wake.
What are some warning signs that a lender may be predatory? Look for these:
- The lender appears out of the blue. Maybe you found them through advertising in the mail, a flyer on your car or via direct marketing to your phone or email. Most mortgage lenders don’t have to work to drum up business, especially when the real estate market is hot.
- The lender makes a lot of promises without doing much in-depth questioning. You want to avoid fast-talking mortgage representatives who seem like they’re “selling” you a deal. Be particularly wary if they promise that bad credit is not a problem.
- The lender makes you feel like you can’t afford to think things over. If you’re being pressured in to signing an agreement right away, that’s a worrisome sign. Legitimate lenders don’t want people to apply for a loan unless they’re ready.
- The lender’s rate seems high or doesn’t match what you were initially promised. If the interest rate on your paperwork isn’t the interest rate you were quoted, that’s a problem.
- The lender tells you that it’s okay to lie on your application. It’s not. That’s mortgage fraud, and making false representations can get you in to serious trouble.
As a home buyer, it’s smart to be cautious. An experienced real estate attorney can help protect your interests and keep you from making a serious mistake.