April 26, 2018

3 Ways Lenders May Mislead Borrowers

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3 Ways Lenders May Mislead Borrowers

National Mortgage News recently spotlighted ways some mortgage originators unintentionally --or intentionally -- mislead borrowers. Here are a few things to be on the lookout for.

1. The big deal. Lenders violate the Consumer Financial Protection Bureau rules if they advertise lower rates than they actually provide.

Read more: Tap Local Banks for Better Mortgage Options

2. Doctor’s note required. Lenders cannot tell applicants with disabilities that they will need to provide a doctor’s note in order to qualify for a Federal Housing Administration loan. Applicants are not required to do so. In fact, the request is considered a prohibited form of discrimination.

3. Hidden kickbacks. Lenders cannot refer borrowers to other parties but then fail to disclose to the borrower that they have an arrangement involving payments for referring clients to the third-parties. CFPB considers that a deceptive marketing practice.

See all seven ways “lenders lie to borrowers” at the National Mortgage News’ website.

Source: “Seven Ways Lenders Lie to Borrowers,” National Mortgage News (March 2016)