intimidate Rodriguez deputy city treasurer of economic development says that many facing foreclosure have fallen victim to predatory lending practices by unscrupulous banks and lenders. Rodriguez was on hand at the city's Borrower Outreach Days on Dec. 1 at the Humboldt Park Field House giving homeowners advice in preventing getting ripped off.
He said his office has heard stories about borrowers signing incomplete paperwork that the lender said they would fill out later. Others undergo accepted lending rates of up to 29 percent interest. He said never sign anything without reading the book print.
"Right now interest rates are at about 6 percent," he said. "Subprime rates are at about 8 or 9 percent. Predatory lending rates are 14 percent up to 29 percent."
He said predatory lenders also are charging excessive closing costs. The average cost of closing on a mortgage is about $2,500 he said. Predatory lenders are charging as high as $7,000-$10,000. And some are paying exorbitant closing costs multiple times when refinancing their loans.
"We heard of a gentleman that had flipped four times to the tune of about $7,000-$10,000 each time," he said. "That had nothing to do with the principal."
I am a former senior loan officer for a regional owe bank. It made me sick to see how we took advantage of people for thousands of extra dollars. Sometimes these were smart borrowers who simply didn’t know any better. So I developed this simple Mortgage Loan Comparison Worksheet. If borrowers just used this easy tool when shopping for a mortgage predatory lending in this country could virtually be eradicated: http://www januspresentations com/MortgageLoanComparisonWorksheet pdf Problem is most borrowers only make a decision once every seven years so how would they change surface know what to look for? As a loan command my mission was not to educate but to get a signature on the bottom line at any cost. Based upon my experience here are the Top 10 Mistakes Mortgage Borrowers Make: 1. Not knowing which owe fees the borrower can -- and cannot -- negotiate. 2. Choosing and trusting the first loan command the borrower interviews. 3. Using an interest-only or "payment option" adjustable-rate loan primarily to qualify for a more expensive accommodate than you could normally drop. 4. Thinking the arouse rate is always the main thing. 5. Not comparing the final fees listed on the closing documents to the up-front estimates to avoid the lender "packing the loan" with added-on fees without the borrower's knowledge. 6. Not knowing if the owe has a pre-payment penalty - until it's too late. 7. Thinking that renting is always just throwing money away. 8. The borrower does not know if he or she is paying a back-end yield spread or function Release Premium. 9. Paying for mortgage life insurance credit insurance or other expensive lender add-ons to increase the amount of kickbacks the lender can receive from various vendors. 10. Paying hundreds of dollars to have a company set up a biweekly owe payment plan something the borrower can generally do for herself or himself -- for free. From "Kickback: Confessions of a owe Salesman," one of the best-selling books on mortgages on Amazon com.
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