What does the Kentucky Real Estate Commission say about ......
WHAT YOU NEED TO KNOW ABOUT BUYING AND SELLING A HOME
This brochure will outline laws and issues that affect consumers in their purchase and sale of real property
LOAN ISSUES Predatory Lending
There are companies who are involved in what is known in the industry as "predatory lending." Predatory lending involves usurious interest rates, very high pre-payment penalties, single-premium credit life insurance and similar high and unnecessary fees.
If you are involved in a mortgage process and fear that the company is charging too much interest or requiring you to pay unnecessary insurance premiums, you may contact the Department of Financial Institutions, your local Housing and Urban Development branch or your local county government office to file a grievance and launch an investigation.
In addition, you should never sign a closing (HUD-1) statement that does not accurately reflect the actual transaction that took place. This statement shows the federal government exactly how much money changed hands for tax and other purposes. It is a federal bank fraud violation to sign an inaccurate form. If a mortgage company asks you to re-write a contract using a different sales price or different terms than you agreed to, you should walk away from that deal. Moreover, it is a felony to file a deed that does not accurately state the actual purchase price of a piece of real property.
As a consumer, it is not in your best interest to purchase a piece of property that you cannot afford. Over 80% of properties that involve predatory lending result in foreclosure. The goal of home financing is to find a property that you can afford so that you can live there, build up equity and enjoy peace of mind. This is also the reason that finance companies have underwriting standards. Their accountants and actuaries have determined how much a particular consumer can afford based upon tried-and-true principles. To try to avoid these standards and purchase a home that is above your price range will certainly lead to problems.
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Financing Options
Connie Lou Barnett
Home Realty, GMAC Real Estate
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