Beware fraudulent lending practices

Georgia residents who are struggling to keep up with their mortgage payments can understandably be worried about how they may avoid losing their homes and how to deal with sometimes aggressive debt collectors and lenders. One thing people in this situation should investigate is the validity of their mortgages. Sadly, some mortgage are better than others and that is not always about interest rates.

As the Federal Bureau of Investigation points out, mortgage fraud may be perpetrated by brokers, bank officials, appraisers and others involved in the purchase and sale of real estate. When these professionals use their industry knowledge to unfairly profit and essentially take money out of the hands of consumers or even banks, innocent people are put at risk of having bad loans.

According to the Office of the Comptroller of the Currency, an agency within the U.S. Department of Treasury, there are clear rules and laws around fair lending practices. All persons involved in the mortgage application and approval process should know of and follow these laws. Failure to do so may be unethical and leave borrower's holding a bad loan.

Lenders must fully disclose all fees and terms to consumers before any loan is signed or approved. Brokers or others who push borrowers to refinance or get new loans too frequently should be watched as they may be more interested in earning fee income than helping their clients. Loans should always be granted based upon a borrower's proven ability to make payments, not on the value of the home.




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