Released July 1, 2009
URBANA, Ill. - Want to avoid being the next victim of predatory lending? Answer the following 10 questions provided by the Mortgage Bankers Association to make sure you're not being misled about your mortgage loan and what it will cost you, said a University of Illinois Extension consumer and family economics educator.
"If you answer yes to some of these questions, we recommend you contact the appropriate agency--your state's Office of the Attorney General, the Consumer Fraud Bureau to fill out a consumer complaint form, the U.S. Department of Housing and Urban Development's (HUD's) field office, or your state's Office of Banks and Real Estate," said Susan Taylor.
1. Were you encouraged to include false information on your loan application?
2. Were you asked to leave signature lines or any other important line item of any form blank?
3. Did the lender or broker alter any information you entered on your loan application? (Check your loan file. Are any of the following disclosures missing? Look for the good faith estimate, special information booklet, truth-in-lending statement, and the HUD-1 Settlement Statement.)
4. Have you refinanced your loan several times? In each instance has the monthly payment increased and/or the total amount you owe increased on your home?
5. Do your documents reveal that your interest rate calculation will change to require you to pay "daily interest" when your payments are late?
6. Is the loan amount on the loan you obtained higher than the value of the home?
7. After settlement, were you surprised to find that the monthly payments on your mortgage loan were higher than you anticipated based on the initial disclosures?
8. Did you incur any unexpected costs at settlement that were not explained to you prior to the settlement?
9. If you have a balloon loan (one in which after a series of low payments, the entire loan balance is due in a large lump sum), will you need to obtain another loan to finance that final lump-sum amount?
10. Were you required to buy credit insurance, insurance that will repay the debt if you die or become disabled? (Note: Credit insurance is optional and will not affect your loan decision if you decline to buy it. It can, however, add considerable cost to the loan transaction. You should decide whether you are going to purchase credit insurance carefully.)
"The federal laws and the Real Estate Settlement and Procedure Act (RESPA) and the Truth in Lending Act protect your rights during the closing process. And there are state laws in force to protect you from abusive lending practices such as excessive fees and high rates," said Taylor.
In Illinois, the following agencies and resources can help you decide whether you've been the target of predatory lending practices and what to do about it:
Illinois Office of Attorney General--Consumer Fraud Bureau--Consumer Complaint Form; http://www.ag.state.il.us/consumers/index.html; Chicago, 1-800-386-5438, TTY 1-800-964-3013. Springfield, 1-800-243-0618, TTY 1-877-844-5461. Carbondale, 1-800-243-0607, TTY 1-877-675-9339.
HUD Field Office, Regional Office, Chicago, Ralph Metcalfe Federal Building, 77 W. Jackson Blvd., Chicago, IL 60604-3507; 312-353-5680. Springfield Field Office, 500 W. Monroe St., Suite 1 SW, Springfield, IL 62704; 217-492-4120.
State of Illinois, Office of Banks and Real Estate, 500 East Monroe Street, Springfield, IL 62704; 217-782-3000 or TDD 217-524-6644. Chicago: 122 S. Michigan Ave., Suite 1900, Chicago, IL 60603; 312-793-3000 or TDD 312-793-0291. Toll-free Consumer Hotline: 877-793-3470.
Illinois Office of Attorney General, State of Illinois, Office of Banks and Real Estate: http://www.obre.state.il.us/AGENCY/aboutobre.htm
For more information on preventing foreclosure, visit U of I Extension's "Getting Through Tough Financial Times" website at http://www.ToughTimes.illinois.edu. "You'll also find advice on which bills to pay first, how to talk to creditors, saving food dollars, handling stress, and more," said Taylor.
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http://www.aces.uiuc.edu/news/stories/news4833.html
Source: Susan Taylor, (708) 720-7520, setaylor@illinois.edu
Writer: Phyllis Picklesimer, (217) 244-2827, p-pickle@uiuc.edu
