Title:
Borrowers facing
problems with the Mortgage Industry
Word Count:
783
Summary:
According to the
National Mortgage Complaint Center, the number of fraud cases in the mortgage
has increased over the recent years. Mortgage companies have been using false
documents and getting them signed by borrowers. Many of them have even charged
high interest rates and borrowers have been making such high interest payments
due to lack of awareness on recent market trends.
Keywords:
mortgage,
mortgage problems, mortgage news, home equity, Borrower's problems
Article Body:
Mortgage industry
is playing an important role today to meet the people's needs. The industry is
constantly engaged in making changes and bringing new ways to assist people in
some of their most important personal and financial decisions. The industry is
involved in making changes to suit people's requirements keeping in mind their
financial conditions. Along with conventional fixed rate products mixtures of
typical adjustable rate mortgage products, interest-only and payment option
type ARMs, high LTV financing and FHA products have been introduced. This
expansion and variety in the products is intended to help larger number of
people to qualify for the home ownership. There is a fair competition among the
lenders to provide customers with the best rates staying within the boundaries
of State law. Customer satisfaction is paid maximum importance today. This
trend has helped the borrowers belonging to all levels as the positive affect
is now reaching people on a wider range. People have got the opportunity to
take advantage of a wide range of products available in the current market.
This has raised the buying process with a greater mass being able to
participate in the program. But with this positive feature there has been a
recent trend of increase in the number of fraud cases in the industry which is
a growing problem in the industry today.
According to the National Mortgage Complaint Center, the number of fraud cases
in the mortgage has increased over the recent years. Mortgage companies have
been using false documents and getting them signed by borrowers. Many of them
have even charged high interest rates and borrowers have been making such high
interest payments due to lack of awareness on recent market trends.
It is found out that an average homeowner in the United States has to pay $1250
more in sub-prime mortgage industry. Sub-rime mortgage are offered to high risk
borrowers who may have been rejected by other lenders. In recent years this
industry has seen a considerable growth with a lot of consumers getting
qualified for this loan. Consumers who face difficulty with the credit market
are generally availing this loan. But, this growth has simultaneously given
rise to predatory lending affecting the most vulnerable lenders. This kind of
abusive lending is generally directed to the lower income and minority
borrowers. Generally the elderly homeowners with reduced incomes become the
target of these sub-prime home equity lenders as they often have considerable
amount of equity in their homes. The most harmful practice begins with a loan
based on the home equity rather than on borrower's ability to repay. These
borrowers often fail to repay and the lenders acquire the borrower's home
equity and ultimately the borrower loses his home through foreclosure or by
signing a deed to the lender in lieu of the foreclosure. There are some other
kind of abusive practices which are illegal under various federal or state
laws.
Considering the growing rate of predatory lending in the mortgage industry, the
National Mortgage Complaint Center has decided to have an audit service for
protecting homeowners from abusive lending practices. But borrowers should also
be aware of such unlawful activities and keep themselves away from such
lenders.
Borrowers should consider some preventive measures to protect themselves from
predatory lenders. They should not go by the rates that lenders often
advertise. These rates are in fact, much lower than the actual fees charged by
such lenders. The lenders advertise such low rates just to lure consumers so
that they can approach them for loans.
Borrowers should demand a written copy of the fees that they keep paying to the
lender on a monthly basis. This is because lenders often provide an estimate of
fees at closing and later they charge higher fees pretending that they have
forgotten to include these charges. But keeping the proofs of such documents
will help borrowers in case of any discrepancies in the mortgage process.
If there is a rise in rate in the market during the time period between the
application and closing, the lenders charge higher rate to borrowers. On the
other hand if the rate falls downwards, the lenders try to ignore it and the
borrowers are deprived of the advantage of the lower rate. So, the borrowers
should monitor the market during this period.
The borrowers should try to keep a track of all the documents involved during
the process and ask for proper clarifications wherever they have a doubt. Going
this way will minimize the problems of being cheated by the mortgage companies
to some extent. The borrowers should try to consult an Attorney or a
professional known to the borrower and get the documents verified by them.