Predatory Lending

Page 3

Tips On Being A Smart Consumer:

1. 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.

2. Interview several real estate professionals (agents), and ask for and check references before you select one to help you buy or sell a home.

3. Get information about the prices of other homes in the neighborhood. Don't be fooled into paying too much.

4. Do not let anyone persuade you to make a false statement on your loan application, lying on a mortgage application is fraud and may result in criminal penalties.

5. 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.

6. Shop for a lender and compare costs. Be suspicious if anyone tries to steer you to just one lender.

7. 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. To find an HUD office near you to go:
www.hud.gov/offices/hsg/sfh/hcc/hcc_home.cfm

8. Be suspicious when the cost of a home improvement goes up if you don't accept the contractor's financing.

9. 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.

Remember: If a deal to buy, repair or refinance a house sounds too good to be true, it usually is!

Housing counselors working at HUD approved agencies can help you be a smart consumer. To find a counselor near you, call (800) 569-4287 or go to HUD's housing counselors list online at www.hud.gov/offices/hsg/sfh/hcc/hcc_home.cfm

Page 1 What is Predatory Lending?
Page 2 What Tactics Do Predators Use?
Page 4 How To Avoid Predatory Lending

References:
www.hud.gov/offices/hsg/sfh/buying/loanfraud.cfm
U.S. Department of Housing and Urban Development
451 7th Street S.W., Washington, DC 20410
Telephone: (202) 708-1112 TTY: (202) 708-1455

SCAMS & FRAUD
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