I had a situation that I have never had before in all of the years I have been doing Real Estate. A "Broker" (I will leave names out to protect the innocent and GUILTY) was giving the buyers figures that were not realistic at all. I questioned them and the deal fell apart. This "Broker" had a way of talking to the buyers that I had never seen before. It was un natural the hold he had over them. I am truly sad for the buyers because they were the only ones that lost out in this ordeal. Not only did they lose money but they lost the house that they loved. This "Broker" is in my opinion what they consider a predatory lender. I found this article on the HUD website and I thought it was worth posting on here. I believe that knowledge is power in any situation. They buyer has to have a knowledge of what is going on so they do not fall into these traps!! Protect Yourself from Predatory Lenders
Buying or refinancing your home may be one of the most important and complex financial decisions you'll ever make. Many lenders, appraisers, and real estate professionals stand ready to help you get a nice home and a great loan. However, you need to understand the home buying process to be a smart consumer. Every year, misinformed homebuyers, often first-time purchasers or seniors, become victims of predatory lending or loan fraud.
Don't let this happen to you!
11 Tips On Being A Smart Consumer
- Before you buy a home, attend a homeownership education course offered by the U.S. Department of Housing and Urban Development (HUD)-approved, non-profit counseling agencies.
- Interview several real estate professionals (agents), and ask for and check references before you select one to help you buy or sell a home.
- Get information about the prices of other homes in the neighborhood. Don't be fooled into paying too much.
- Hire a properly qualified and licensed home inspector to carefully inspect the property before you are obligated to buy. Determine whether you or the seller is going to be responsible for paying for the repairs. If you have to pay for the repairs, determine whether or not you can afford to make them.
- Shop for a lender and compare costs. Be suspicious if anyone tries to steer you to just one lender.
- Do NOT let anyone persuade you to make a false statement on your loan application, such as overstating your income, the source of your downpayment, failing to disclose the nature and amount of your debts, or even how long you have been employed. When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete. Lying on a mortgage application is fraud and may result in criminal penalties.
- Do NOT let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property.
- Never sign a blank document or a document containing blanks. If information is inserted by someone else after you have signed, you may still be bound to the terms of the contract. Insert "N/A" (i.e., not applicable) or cross through any blanks.
- Read everything carefully and ask questions. Do not sign anything that you don't understand. Before signing, have your contract and loan agreement reviewed by an attorney skilled in real estate law, consult with a trusted real estate professional or ask for help from a housing counselor with a HUD-approved agency. If you cannot afford an attorney, take your documents to the HUD-approved housing counseling agency near you to find out if they will review the documents or can refer you to an attorney who will help you for free or at low cost.
- Be suspicious when the cost of a home improvement goes up if you don't accept the contractor's financing.
- Be honest about your intention to occupy the house. Stating that you plan to live there when, in fact, you are not (because you intend to rent the house to someone else or fix it up and resell it) violates federal law and is a crime.
What is Predatory Lending?
In communities across America, people are losing their homes and their investments because of predatory lenders, appraisers, mortgage brokers and home improvement contractors who:
- Sell properties for much more than they are worth using false appraisals.
- Encourage borrowers to lie about their income, expenses, or cash available for downpayments in order to get a loan.
- Knowingly lend more money than a borrower can afford to repay.
- Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
- Charge fees for unnecessary or nonexistent products and services.
- Pressure borrowers to accept higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.
- Target vulnerable borrowers to cash-out refinances offers when they know borrowers are in need of cash due to medical, unemployment or debt problems.
- "Strip" homeowners' equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.
- Use high pressure sales tactics to sell home improvements and then finance them at high interest rates.
What Tactics Do Predators Use?
- A lender or investor tells you that they are your only chance of getting a loan or owning a home. You should be able to take your time to shop around and compare prices and houses.
- The house you are buying costs a lot more than other homes in the neighborhood, but isn't any bigger or better.
- You are asked to sign a sales contract or loan documents that are blank or that contain information which is not true.
- You are told that the Federal Housing Administration insurance protects you against property defects or loan fraud - it does not.
- The cost or loan terms at closing are not what you agreed to.
- You are told that refinancing can solve your credit or money problems.
- You are told that you can only get a good deal on a home improvement if you finance it with a particular lender.
Remember:
If a deal to buy, repair or refinance a house sounds too good to be true, it usually is!
To Those of You Born
1930 - 1979
At the end of this email is a quote of the month by Jay Leno. If you don't read anything else, please
read what he said.
Very well stated, Mr. Leno..
TO ALL THE KIDS WHO SURVIVED THE
1930's, 40's, 50's, 60's and 70's!!
First, we survived being born to mothers who smoked and/or drank while they were pregnant.
They took aspirin, ate blue cheese dressing, tuna from a can and didn't get tested for diabetes.
Then after that trauma, we were put to sleep on our tummies in baby cribs covered with bright colored lead-base paints.
We had no childproof lids on medicine bottles, locks on doors or cabinets and when we rode our bikes, we had baseball caps not helmets on our heads.
As infants & children, we would ride in cars with no car seats, no booster seats, no seat belts, no air bags, bald tires and sometimes no brakes.
Riding in the back of a pick- up truck on a warm day was always a special treat.
We drank water from the garden hose and not from a bottle.
We shared one soft drink with four friends, from one bottle and no one actually died from this.
We ate cupcakes, white bread, real butter and bacon. We drank Kool-Aid made with real white sugar. And, we weren't overweight. WHY?
Because we were always outside playing....that's why!
We would leave home in the morning and play all day, as long as we were back when the streetlights came on.
No one was able to reach us all day. And, we were O.K.
We would spend hours building our go-carts out of scraps and then ride them down the hill, only to find out we forgot the brakes. After running into the bushes a few times, we learned to solve the problem.
We did not have Playstations, Nintendo's and X-boxes. There20were no video games, no 150 channels on cable, no video movies or DVD's, no surround-sound or CD's, no cell phones, no personal computers, no Internet and no chat rooms.
WE HAD FRIENDS and we went outside and found them!
We fell out of trees, got cut, broke bones and teeth and there were no lawsuits from these accidents.
We ate worms and mud pies made from dirt, and the worms did not live in us forever.
We were given BB guns for our 10th birthdays, made up games with sticks and tennis balls and, although we were told it would happen, we did not put out very many eyes.
We rode bikes or walked to a friend's house and knocked on the door or rang the bell, or just walked in and talked to them.
Little League had tryouts and not everyone made the team. Those who didn't had to learn to deal with disappointment.
Imagine that!!
The idea of a parent bailing us out if we broke the law was unheard of. They actually sided with the law!
These generations have produced some of the best risk-takers, problem solvers and inventors ever.
The past 50 years have been an explosion of innovation and new ideas.
We had freedom, failure, success and responsibility, and we learned how to deal with it all.
If YOU are one of them? CONGRATULATIONS!
You might want to share this with others who have had the luck to grow up as kids, before the lawyers and the government regulated so much of our lives for our own good.
While you are at it, forward it to your kids so they will know how brave and lucky their parents were.
Kind of makes you want to run through the house with scissors, doesn't it ?
~
The quote of the month is by Jay Leno:
'With hurricanes, tornados, fires out of control, mud slides, flooding, severe thunderstorms tearing up the country from one end to another, and with the threat of bird flu and terrorist attacks, are we sure this is a good time to take God out of the Pledge of Allegiance?'
Short sales!!!
Let me just start that there are so many short sales out there and a buyer can get such a great deal. It is a great time to be a buyer!!
On the flip side you have the owner that owes more than the house is worth. After exploring all options their only choices are foreclosure or a short sale.
If you can get the bank to agree to a short sale, that is only the beginning! The do not tell you that they will do your paperwork at their own sweet time! They will give you a time frame and when that comes and goes then they just give you another one. It is irritating on the buyers, sellers, and agents.
Each bank is different. I just do not understand why they feel the need to not treat this with importance! The bank has a choice here. They can take a loss of the difference of the sales price to the loan amount or they can have the house back and get nothing until they sell it. In that time, they have to pay to keep the property up, taxes and many other things! It just makes no sense why they just take their own sweet time.
I have to say, that I am enjoying the short sale that I have working right now. I see it as a challenge. What new info can I get out of the bank each day. Who is telling me info that is not the same as the other info I was given and how I can get it to move along. So far I am having pretty good success with it.
One thing I have learned in this is patience! As hard as that is, it is a must! There is no reason that this process should take MONTHS before you even know what offer will be accepted or rejected!
Can you believe this year is half over already! As we come upon the 4th of July, I was pleasantly surprised to see my daughters’ daycare really teaching the kids about what the true meaning of that day is.
It is easy to forget the meaning of it as we gather with out friends and family, not to mention exploding anything we can get out hands on!! (Well at least my family does!)
We have so many men and women in our own country as well as other countries risking their lives for our freedom. Without them where would we be? It is scary to think about!
I hope you all have a wonderful Independence Day and please take a moment to think of what it means to you and how it affects your life.
Have a happy and safe holiday!
Tiffany
|
RSS Feed