Predatory Lendors May seek homebuyers

Home ownership is at an all time high, which is great news. The bad news is that something is robbing homeowners of money and putting many of these families at risk of losing their homes predatory lending. Busey Banks Susan Abbott is here to help prevent us from becoming victims. Q1: What is predatory lending? · No clear-cut definition. Most agree that it is the result of a company misleading and taking advantage of someone by convincing them to take out a home loan (usually a home equity loan or refinancing a mortgage) at excessive costs and without regard to the homeowners ability to repay. Victims who have trouble repaying a predatory loan often face harassing collection tactics or are encouraged to refinance the loan at even higher fees. · Most important thing to remember: if you pledge your home as collateral for a loan, and you cant repay, you could lose your home. Q2: Who are likely victims? · Reports indicate these lenders target consumers they believe are in need of cash or are otherwise vulnerable. Often victims are older people who need money for medical bills or home repairs; moderate- and middle-income consumers who need to pay off credit card bills or consolidate other debts or who want to make some dream purchase; lower income or minority communities where there may be limited competition from reputable lenders. Q3: Arent there laws to protect consumers? · Truth in Lending Act requires lenders to provide timely information about loan terms and costs. Also gives consumers the right to cancel a home equity loan and certain other loans secured by a home up to three business days after signing the loan contract, known as "right of rescission". · Under the Home Ownership and Equity Protection Act (HOEPA), if a refinancing or home equity loan is classified as "high cost", the lender must provide key information about the loan three days before closing. HOEPA also prohibits lenders from making a home equity loan without regard to a borrowers ability to repay. Q: How can we protect ourselves? · Dont rush into a decision with any loan, but especially one where you can lose your home if you cant make your payments. · Be aware of your options, especially the different kinds of loans available from reputable lenders. · Review the terms and conditions of the loan before your sign on the dotted line. · Remember if you have questions or concerns, there are reputable lenders, government agencies and other community organizations that can help you. You do not need to face a loan problem alone. For more information: http://www.obre.state.il.us/Predatory/prey.pdf