Beware of Predatory Lending it Could Lead to Foreclosure
Posted on February 2, 2010
Filed Under Foreclosures | Leave a Comment
One of the first things that you need to make sure that you have so that you can prevent a foreclosure against your real estate home is to have the adequate mortgage loan company.
Of course, this does not mean that you have to have one that you are pleased with, but that the one that you select is also ethical and committed to help achieve your goal.
Finding out which mortgage company is the one that you should hire or the one that you should do business with is not limited to the interest rate or the documentation that they ask of you. The process, though it is simple, does require a lot more commitment than that from you. One of the most important things to consider and be on the lookout for is predatory lending.
Predatory lending refers to the abusive and aggressive behavior that some of the mortgage lending companies have been inflicting on their borrowers; as the common belief goes, before the signature of the contract, everything is sweet as honey. Once the contract has been signed, the darkness falls and the borrower is prey of a predatory lending company.
For example, since predatory lending is a term that sounds too scary and quite impossible to detect. “Mr. X” signed with a company so that he could acquire his house, eventually and due to unexpected events he was unable to continue the payment of his mortgage loan.
Naturally, he turned to his mortgage lending company for assistance and guidance but what he found was that the mortgage lending company initiated the process of foreclosure against him. This is predatory lending; of course, in addition, it breaks several government dispositions.
In another example, “Mrs. Y” has been a punctual borrower, paying her mortgage in time and never falling behind once in several years. Nonetheless, this time, her sister has fallen ill and they have to resort to any amount they can possibly get to get the hospital bills.
She will be able to get back on track, but it will take her a few months; so she approaches her company representative and asks for leniency. The result of her action will cast her into a whirl of desperation because while her representative tells her that there is no problem, the company will immediately register a negative note on her credit history.
The problem will start as the hospital checks on her credit history to make sure that she will come through with the medical bills of her sister. This is also predatory lending; the federal government is aware that mortgage lending companies are carrying out such corporate actions and as a consequence it has started to create and to implement a diversity of restrictions and committees to oversee the correct and ethical activities and actions from the mortgage lending companies to their borrowers.
Of course, there is always the possibility there is no predatory lending on behalf of the company that you are planning to sign with and that the ill references come from delinquent borrowers who have been failing to comply with the company guidelines.
If you believe that a predatory lending company has attacked you or you want to make sure that the company that you have selected isn’t one, approach your local HUD agency or Better Business Bureau office.