Did you know that North Carolina does not require that mortgage lenders be located in the state? That leaves the door open for many out of state lenders to attempt to do business in North Carolina.
Lending over the Internet continues to be unreliable and in many cases leading to fraudulent behavior that scams the borrower. Here’s what you need to know:
Verbal Quote. Never value a quote that has been given verbally or over the Internet that neglects the steps of pulling your credit, completing a documented application and providing a written good faith estimate and Truth-in-Lending statement. There is not penalty for lying to a customer, who may be shocked to receive an initial verbal approval to find their application rejected later on.
Upfront Fees. This is a common tactic that involves collection of an appraisal fee, and an upfront fee, which is illegal for a licensed loan originator to collect in North Carolina. Since online lenders do not adhere to North Carolina laws, they collect these fees anyway.
Low bid appraisals. Out of state lenders also use contract appraisers and title agents who bid on an appraisal. This is one reason why there are so many complaints regarding the home not being appraised properly, incomplete or inaccurate title work, and mishandled closings.
Here’s how you can avoid getting scammed by your mortgage lender:
1. Be aware of these unethical practices, and cease working with a lender if you see these policies.
2. Use these questions to interview your appraiser!
3. Work with a reliable mortgage broker who builds a relationship with their client rather than taking your money upfront.
4. If a loan product sounds too good to be true, it is. Do as much research as you can to feel confident about your home-buying or refinancing decision.
As rates have increased in recent months from record lows, more local lenders and loan originators are exiting residential mortgage lending in North Carolina as competition increases. Don’t be caught in a lending scam as more online mortgage lenders appear.
Read the full article here with some great mortgage tips!
“Mortgage Lending is Our Business: Customer Service is Our Passion.”
Stay tuned and stay in touch with your mortgage professional. Thank you for the opportunity to serve you. David. 919.851.0999.
Raleigh Mortgage Man, NC Mortgage Man, Triangle Mortgage Man, Triangle Mortgage Expert all owned and licensed by David M. Damare’. All rights reserved.
Tags: mortgage lending, mortgage lending scams, mortgage scams
