University of Illinois Extension

The Ten Warning Signs of Predatory Lending

To avoid being the next victim of predatory lending, answer the following ten questions to make sure that someone is not misleading you about a loan and its costs to you. Just because you answer "yes" to these questions does not mean you are or have been a victim of predatory lending.

But, if you answer "yes" to some of the questions, it is recommended you contact the appropriate state agency, - Illinois Office of Attorney General - Consumer Fraud Bureau - Consumer Complaint Form; HUD Field Office; or State of Illinois, Office of Banks and Real Estate; for more information and guidance.

According to the Mortgage Bankers Association (MBA), the Borrower's Bill of Rights is to help borrowers understand how they should expect to be treated in the mortgage lending process.

  1. Were you encouraged to include false information on your loan application?
  2. Were you asked to leave signature lines or any other important line item of any form blank?
  3. Did the lender or broker alter any information you entered on your loan application?

    Check your loan file. Are any of the following disclosures missing?
    • Good Faith Estimate
    • Special Information Booklet
    • Truth in Lending
    • HUD-1 Settlement Statement
  4. Have you refinanced your loan several times? In each instance has the monthly payment increased and/or the total amount you owe increased on your home?
  5. Do your documents reveal that your interest rate calculation will change to require you to pay "daily interest" in instances when your payments are late?
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