Fair Lending Is Required by Law. The Equal Credit Opportunity Act prohibits lenders from discriminating against credit applicants in any aspect of a credit transaction on the basis of race, color, religion, national origin, sex, marital status, age, whether all or part of the applicants income comes from a public assistance program, or whether the applicant has in good faith exercised a right under the Consumer Credit Protection Act. The Fair Housing Act prohibits discrimination in residential real estate transactions on the basis of race, color, religion, sex, handicap, familial status, or national origin. Under these laws, a consumer cannot be refused a loan based on these characteristics nor be charged more for a loan or offered less favorable terms based on such characteristics.
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.
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 down payments 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.
Remember: If a deal to buy, repair or refinance a house sounds too good to be true, it usually is!