After several testimonials this year from realtor's and prospective buyers, and again yesterday another horror story, makes the picture I've chosen apropos (does the word "predatory lending" mean anything?). Here it is: Buyer's hire an agent to represent them in finding and purchasing a home. The professional agents will get the buyer pre-qualified with a reputable lender, usually one the agent has done business with and knows the lender and mortgage officer to have a good track record of not only knowing their business but being honest as well. Lender tells buyer that at this time they can not obtain a loan based on credit, job history or maybe both. Buyer wants a home so they go out and, are you going to be surprised at this?...they are able to find a lender (many times it's over the Internet) that tells the buyer, why yes, we can do the loan for you.
Understandably the potential purchaser is very excited, figures the first lender and the Realtor don't know what they are talking about, and proceeds with the contract to purchase the home they've picked out. In this last case, as with most of the others I've been hearing, the buyers now have an accepted contract, they pay the lender another $65-80.00 for loan application, put up earnest money-lets say $1,000, they paid the seller $100.00 option fee, paid approx. $350.00 for their inspections and had already paid the appraisal fee of $350.00. Then one week (most of time it's several days) before the scheduled close, lender says oops, sorry, can't do your loan. All this could have been avoided if they would have done a little more homework. At least get the opinion of another local lender that came highly recommended.
Call or email me for the article on predatory lending. I'll be glad to send it to you. My work #817-276-5149 & email is steve@steveyoung.pro
Mortgage lending is complicated and confusing and that is why historically Realtors and honest mortgage lenders have always worked together. A professional Realtor who holds the lender accountable to working in your best interest is always a great defense against the Predatory Lender. Not all buyer's who are turned down for a loan are the victims of predatory lending. It is the ones who are promised a loan when chances are the lender knew all along they could not do the loan but were glad to take the buyer's money upfront and hope that it somehow might work. Also check out Lonnie Coffey's blogs on the mortgage industry!
