Lender Guidelines May Help You Pinpoint the Predators

With the July 1 implementation of AB 489, a California law prohibiting predatory lending practices, the California Assn. of Mortgage Brokers has issued these guidelines to help consumers identify unscrupulous lenders:

* Never sign a contract without knowing and understanding all terms of the loan. Originators should be willing to explain all loan terms and conditions.

* Never allow yourself to be pressured into a loan. Reputable mortgage originators strive to make consumers aware of and comfortable with their options.

* Beware of door-to-door and telephone solicitations.

* Never sign a blank form in a loan package and be sure to get copies of all documents bearing your signature.

* Request an accounting of all fees associated with the transaction. Question any fees you do not understand.

* Shop around for a loan originator that you are comfortable with. CAMB offers referral services at www.cambweb.org or by phone at (800) 253-2262.

* Make sure that you can afford the proposed monthly payments. Do not agree to payments that you cannot comfortably make.

* You have three days to cancel a refinance transaction for any reason if you are unhappy with the loan. This is called the three-day “Right of Rescission.”

* Make sure the loan officer is licensed to originate mortgage loans.