..........mortgage lender, that is.
Ted Janusz, ex-broker, and brave soul, uncovers the shady lending tactics and kick-backs within the lending industry in his new book KickBack: Confessions of mortgage salesman. It should make for an interesting read; it's on my list! With all this talk lately here on ActiveRain about fraudulent lending practices, I thought I'd mention an interesting article I read online about his book in BusinessWeek. I was dismayed to read that Janusz told BusinessWeek: “If somebody came in wearing cowboy boots and ripped-up jeans, those are the people you took to the cleaners on fees. That was the unwritten rule. We were looking for people we’d see as having less than perfect credit” I always known how crucial it is to dress nicely, but it still burns me up!
According to the CRL (Center for Responsible Lending) it is estimated that predatory lending costs Americans more than $9 Billion a year in lost equity!
One of the most common predatory lending practices is selling a sub-prime mortgage to someone who actually qualified for a prime rate.
Apparently African Americans are also more likely to be taken advantage of. In fact they are 3.6 times more likely to have been given a sub-prime loan than whites. And loans with predatory terms are much more likely to end in foreclosure. Scary, considering that Colorado currently has the highest foreclosure rates in the country, YIKES!
The BusinessWeek article also gives a slideshow list of the "Top 10 Lending Mistakes" to watch out for:
1. Not being aware of the origination fee
2. Too often trusting the first lender you encounter
3. Opting for a variable rate interest only loan in order to qualify for a more expensive home
4. Thinking that the interest rate is the only consideration
5. Not comparing the final fees listed on the closing documents
6. Not knowing if the mortgage has a prepayment penalty
7. Thinking that renting is always throwing money away
8. Not considering back-end yield spread
9. Being coerced into paying for credit or mortgage life insurance
10. Paying extra to set up a bi-weekly payment plan
Please let me know if there are any glaring mistakes or inappropriate content, this being my first blog. I tried to find more information about the rules of quoting/inserting photos and the like, but I always got side-tracked reading everyone else's blogs. And, no, I'm not a lender, nor do I profess to know much about it; I just thought it'd be a more interesting read about than floral arrangements!
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