What is predatory lending?
I received an email last night talking about how Realtors need to help home buyers avoid predatory lending practices. The email talks about mortgage companies who use a bait and switch type of scenario. For example, a loan officer tells you they can get you a loan and what they need from you. They don't lock in the rate or fees. At the last minute, when you arrive at the closing, the home buyer finds out they are paying a higher interest rate than they believed they were getting and are paying higher fees as well. When the lender is called, they are nowhere to be found so the buyer has to take it or leave it. The lender is betting they will take it because they are ready to move into their new home. I work to educate my clients about the loan process and keep in touch with the lender in the hopes things will go smoothly. However, I don't think the Realtors can put a stop to it alone. I have seen banks do this to people but to stop it, we need help.
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