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Predatory Lending Warning Signs | |||
If you've recently closed or are about to complete a home loan that is not at a prime lending rate, or comes with significant points and fees, you should ask yourself these checklist of questions to protect yourself from entering into a potentially predatory loan. | |||
Do you believe there was general deception on the part of Loan Officers and/or closing representatives on behalf of the lender/broker? | Yes | No | |
Were you encouraged to include false information on your loan application? | Yes | No | |
Were you asked to leave signature lines or any other important line-item of any form blank? Did the lender or broker alter any information you entered on your loan application? | Yes | No | |
Did the lender charge excessive points at closing, have a significant range of fees on Good Faith Estimate ("GFE"), or change of loan terms? | Yes | No | |
Did the GFE contain a range of costs so large that it failed to provide you with a fair estimate of cost you face at settlement? | Yes | No | |
Did the lender not supply you with all necessary disclosures (i.e., Good Faith Estimate, Truth-In-Lending, HUD-1 Uniform Settlement statement) prior to closing? | Yes | No | |
Were you unaware of placement of mortgage life insurance on the loan? | Yes | No | |
Do your documents reveal that your interest rate calculation will change to require you to pay "daily interest" in instances when your payments are late? | Yes | No | |
Is your loan amount on the loan you obtained higher than the value of the home? | Yes | No | |
Did the loan have you pay points that did not buy down interest rate? | Yes | No | |
Did the new loan flip a relatively recent loan? | Yes | No | |
Did the loan provide you with no tangible net benefit? | Yes | No | |
Did the lender fail to disclose or verbally misrepresent pre-payment penalties and other fees until closing? | Yes | No | |
Did the loan officer verbally misrepresent a prepayment policy? | Yes | No | |
Did the lender not supply document copies at closing for use during 3-day right of rescission period? | Yes | No | |
Did the lender use various "bait and switch" scenarios? | Yes | No | |
Did the lender delay the loan closing to purposely have lock-in/commitment deadlines expire so that the interest rates rise? | Yes | No | |
Are there fee discrepancies on original disclosures versus revised disclosures given at closing? | Yes | No | |
Are mortgage commitments and Lock-in Agreements not being honored by the lender? | Yes | No | |
Did the lender misrepresent the terms of a bi-weekly mortgage payment program? | Yes | No | |
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? | Yes | No | |
If you have a balloon mortgage, will you need to obtain another loan to finance that final lump-sum amount? | Yes | No | |
Were you a victim of a lender and contractor second mortgage home improvement scam (lender and contractor take money - consumer gets no work done on home - classic predatory loan scheme)? |
Yes | No | |
If you answered "yes" to any of these questions, you may be or have been a victim of a predatory home loan. | |||
For assistance, contact the Department. |
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State of New Jersey New Jersey Department of Banking and Insurance |