Predatory mortgage lending refers to the act of willfully misleading a consumer with regards certain issues about his or her mortgage. The perpetrator of this particular kind of offence usually is the bank or another lending institution. In order to prevent this illegal activity, you have to be aware of the signs of predatory lending. Here are some of them as follows:
• Falsifying income or asset documentation in order to get more from the client.
• Failing to disclose anything that has to do with premiums or hidden fees before the business settlement.
• As a mortgage broker, you should be able to provide significant documentation such as RESPA, the good faith estimate, a booklet on special information and the truth in lending. This way, clients will be able to understand the mortgage terms and policies more clearly. Failure to do so constitutes predatory mortgage lending.
• If a broker or a bank tries to influence the consumer to agree to a higher loan amount or appraisal. A fraudulent broker or financial entity will do his or her best to take advantage of the client’s weakness when it comes to knowledge about the overall transaction.
If you want to become the most recommended mortgage broker in the country, you should practice full disclosure at all times. Be sure to provide all the necessary information that the client will ask for and even those that they neglect to request.
This way, you will be able to lay all the cards on the table even before the transaction begins. It will also help you protect yourself against a lawsuit if ever the transaction falls through.
These are just some of the most common signs of malpractice when it comes to the brokerage. To prevent any misleading promises from a company, be aware of this signs and report the said company to the authorities. Going to a reputable mortgage broker with complete documents and a license to present is recommended.
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