Financial guide: Lenders Beware of predators
In November 2005, Montgomery County, Maryland County Council to enact legislation to expand the categories of loans combined with discriminatory practices in housing discrimination and to increase the maximum penalty for such activities from $ 5000 to $ 500,000. And 'situated practices such as charging a huge amount of prepayment penalties, points and fees, steering borrowers to more expensive mortgages, and refinancing of existing loans to new borrowerswill not be able to repay because of their income or credit.
Predatory lenders in general, so as to non-prime mortgage market, where people with damaged credit records of money to buy homes in less desirable neighborhoods, which often means that minorities such as African Americans and Hispanics, who victims are trying to borrow lending activities known predator.
In February 2006, the American Financial Services Association (AFSA), thepresented and argued that only the state adopted the right to legislate in connection with guides court – even if AFSA went on record as being discriminatory and abusive lending. The new law has been effective in delaying the second week of March but guides lawyers convinced a judge of the new law until a trial. Therefore, it is not yet determined if the Montgomery County law will remain on the books.
Regardless of the outcome inMontgomery County lending practices, however, is too low in most states illegal. Center for responsible lending describes a number of such practices on its website. Some of these loans are mirrors in which the debtor is required to obtain a loan, even several times to refinance for the sole purpose of creating new fees for the bank. Another common practice is to insist that borrowers also purchase things as credit life insurance and other products – againprimarily intended to generate more revenue for the creditor.
The end result is that banks that do a lot of money by charging extra fees for borrowers who can least afford, and thus deprive the debtor is the American dream of owning a property, or worse, who are exposed to a possible foreclosure .
As housing market slows and interest rates creep is more important than ever to beKnowledge of consumers. Learn the basics of mortgages, so you know, if you read too much of a loan or for things that do not. Shop to see what is available and then make sure you are comfortable with the loan payments because you pay the amount for many years.
Copyright © 2006 Jeanette J. Fisher
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