Review of U.S. Mortgage Companies
1701 Pennsylvania Ave
Washington, D.C. 20006
Washington, D.C. 20006
Quick Connect
Connect with the Nation's Highest Rated Mortgage Lenders.
Lender FAQ's
The Lender Review Board couples the resources of both Federal and State regulatory agencies with our own comprehensive review of each U.S. mortgage company.
We actively monitor each lenders rates and fees on closed loans, as well as consumer complaints.
Predatory Lending: Potential Warning Signs
Mandatory Arbitration
Increasingly, some lenders are placing pre-dispute, mandatory binding arbitration clauses in sub prime home loan contracts. As a result, many homeowners have unknowingly signed mortgages that waive their legal rights, stripping them of their rights to present their case to a jury of their peers, and providing unscrupulous lenders with substantial advantages should a dispute arise.
Excessive Fees
Contrary to popular belief, your credit score should not have a significant effect on the amount of fees you pay for a loan. You may be considered a "high risk" borrower, which will be reflected in your rate, but all too often unscrupulous Loan Officers will try to convince you that excessive fees are also a result of your credit score.
Substantial Pre-Payment Penalties
Borrowers with higher-interest sub prime loans have a strong incentive to refinance as soon as their credit improves. However, up to 80% of all sub prime mortgages carry a prepayment penalty -- a fee for paying off a loan early. An abusive prepayment penalty typically is effective more than three years and/or costs more than six months’ interest.
There are also two classifications of a pre-payment penalty. A "hard" pre-payment penalty, which means you will have to pay the fee no matter what happens during the term of the penalty. And a "soft" pre-payment penalty, which means you are not typically obligated to pay the fee if you sell you home before the penalty expires.
Loan Steering
Predatory lenders may steer borrowers into sub prime mortgages, even when the borrowers could qualify for a mainstream loan .Vulnerable borrowers may be subjected to aggressive sales tactics and sometimes outright fraud. Fannie Mae has estimated that up to half of borrowers with sub prime mortgages could have qualified for loans with better terms.
Yield Spread Premiums
Yield Spread Premiums are the cash that Mortgage Brokers get for steering a borrower into a home loan with a higher interest rate. The higher the rate a Loan Officer can sell you, the more money they make in YSP. Although it is disclosed, with the exception of most Banks or Credit Unions, it's typically not seen for the first time until you reach settlement and receive your HUD-1.
Increasingly, some lenders are placing pre-dispute, mandatory binding arbitration clauses in sub prime home loan contracts. As a result, many homeowners have unknowingly signed mortgages that waive their legal rights, stripping them of their rights to present their case to a jury of their peers, and providing unscrupulous lenders with substantial advantages should a dispute arise.
Excessive Fees
Contrary to popular belief, your credit score should not have a significant effect on the amount of fees you pay for a loan. You may be considered a "high risk" borrower, which will be reflected in your rate, but all too often unscrupulous Loan Officers will try to convince you that excessive fees are also a result of your credit score.
Substantial Pre-Payment Penalties
Borrowers with higher-interest sub prime loans have a strong incentive to refinance as soon as their credit improves. However, up to 80% of all sub prime mortgages carry a prepayment penalty -- a fee for paying off a loan early. An abusive prepayment penalty typically is effective more than three years and/or costs more than six months’ interest.
There are also two classifications of a pre-payment penalty. A "hard" pre-payment penalty, which means you will have to pay the fee no matter what happens during the term of the penalty. And a "soft" pre-payment penalty, which means you are not typically obligated to pay the fee if you sell you home before the penalty expires.
Loan Steering
Predatory lenders may steer borrowers into sub prime mortgages, even when the borrowers could qualify for a mainstream loan .Vulnerable borrowers may be subjected to aggressive sales tactics and sometimes outright fraud. Fannie Mae has estimated that up to half of borrowers with sub prime mortgages could have qualified for loans with better terms.
Yield Spread Premiums
Yield Spread Premiums are the cash that Mortgage Brokers get for steering a borrower into a home loan with a higher interest rate. The higher the rate a Loan Officer can sell you, the more money they make in YSP. Although it is disclosed, with the exception of most Banks or Credit Unions, it's typically not seen for the first time until you reach settlement and receive your HUD-1.
2007 © Lender Review Board. All rights reserved. Read Legal statement