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Predatory Lending

Do not lose your house to foreclosure recovery scams.  If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD-approved housing counselor. 

Signs of Predatory Lending

  • Home improvement contractors offering to arrange financing
  • Lenders offering loans to rescue a homeowner from foreclosure
  • Lenders referring rejected loans to subprime lenders that may be their affiliates
  • Misinterpretations and conflicting information (verbal and written)
  • Telephone solicitations, door to door solicitations, direct mail fliers, the internet and TV commercials offering “slow credit, no credit, no problem” loan programs
  • Repeated offers to refinance
  • Loans that require balloon payments
  • High-pressure tactics to get you to sign the loan before reading and understanding the fine print
  • Request for signatures on incomplete or blank loan documents
  • Failure to provide a “Good Faith Estimate”
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Types of Predatory Lending

  • Forged loan documents
  • Hidden terms
  • Incomplete disclosures

Bait & Switch

  •  Qualified borrowers steered away from affordable loans

Balloon loan refinanced with excessive fees

  • Low monthly payments with large final payment

Required credit insurance

  • Credit life insurance
  • Credit disability insurance
  • Unemployment insurance

Prepayment insurance

  • Penalties for paying off a loan ahead of time to keep loan continued as long as possible

Flipping

  • Repeated refinancing of loan balance into a new loan, sometimes without knowledge of the borrower
  • Inflated appraisal values of your home.
  • High interest rates and excessive fees

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Anti-Predatory Lending Program

The Miami-Dade Anti-Predatory Lending Program was created to increase the public’s awareness of Predatory Lenders and their practices; to educate the entire community about available resources and financial alternatives; and to empower homeowners with the knowledge to make informed financial decisions that will help them “keep their homes."

As the lead agency for the Miami-Dade County Anti-Predatory Lending Initiative, the Housing Finance Authority of Miami-Dade County coordinates periodic workgroup meetings comprising of local, state and federal agencies, legal services and legal aid, local housing non-profits, CDC’s and banks. The APLP works cooperatively to address community concerns about predatory lending and to reduce the home foreclosure rate throughout Miami-Dade County.

Every year, homeowners and prospective homebuyers fall victim to predatory lenders. The elderly, minority and low-income families are most likely to be caught in the web of deceptive negotiations, "bait and switch" tactics and lasting financial difficulties.

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Florida Fair Lending Act

The Florida Fair Lending Act prohibits predatory lending practices and requires lenders to disclose certain facts about loans before closing. Charging excess late fees, increasing interest rates on loans going into default, and charging prepayment penalties after the first three years are some of the prohibited activities.

The law also prohibits extending credit without regard to the borrower's ability to repay the loan and requiring full repayment of the loan when the borrower has complied with the terms of the loan.

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Mortgage Assistance Relief Scams

If you're struggling to make mortgage payments or facing foreclosure, the FTC wants you to know how to recognize a mortgage assistance relief scam and exercise your rights. And even if the foreclosure process has already begun, the FTC and its law enforcement partners want you to know that legitimate options are available to help save your home.

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Page Last Edited: Thu Jul 18, 2013 1:23:00 PM
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