Predatory Lending

Consumer Protection Tips

Never sign a contract without knowing and understanding all the terms of the loan.  Originators should be willing to explain all loan terms and conditions.

1. Never allow yourself to be pressured into a loan.  Reputable mortgage originators strive to make consumers aware of and comfortable with their loan options.

2. Beware of door-to-door and telephone solicitations.

3. Never sign a blank form in a loan package, and be sure to get copies o all documents bearing your signature.

4. Request an accounting of all fees associated with the transaction.  Question any fees you do not understand.

5. Shop around for a loan originator that you are comfortable with.

6. Make sure that you can afford the proposed monthly payments.  Do not agree to payments that you cannot comfortably make.

7. You have three days to cancel a refinance transaction for any reason if you are unhappy with the loan.  This is called the three-day "right of rescission."

8. Make sure the loan officer is licensed to originated mortgage loans.  Also question potential brokers regarding their participation in continuing education courses and certifications, making sure your originator is up-to-date on all loan policies and applicable laws.

9. Ask if the broker belongs to the California Association of Mortgage Brokers.  Association members adhere to a code of ethics and standards of professionals practice, with prescribe the highest level of ethical and professional behavior.

Choosing a reputable licensed broker or lender is one of the best way to avoid problems.  Be wary of lenders who make solicitations through mail, email, door-to-door sales or telemarketing. Ask for references.

Reprinted with permission from the California Association of Mortgage Brokers
Prepared by Project Sentinel for PAHC

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