Predatory Lender Red Flags: Rushing, No Credit, Blank Fields

There are sadly a number of areas in our world where unscrupulous people or entities try to take advantage of others financially, and the realm of loans is one of them. Predatory lenders can be found in many areas of the loan world, and unfortunately the area of mortgages is not an exception to this.

At Primary Residential Mortgage, we’re happy to serve as a comprehensive mortgage lending company with a great staff and long track record of reputable dealings — and more than that, we’ve helped many clients recognize the signs of predatory lending from other entities, and avoid them. What are some of the key red flags that often signal a lender who is not actually trying to help you, but rather to take advantage of you? Here are several in this two-part blog series.

Rushing You Every Step of the Way

The mortgage application and acquisition process is a significant one, and it typically takes some time to complete. A predatory lender, on the other hand, will try to push you through the process as quickly as possible without giving you adequate time to understand what’s going on or make decisions.

They may tell you that rates are going up soon so you need to act fast, or that there’s only a limited amount of funding available and you need to take advantage of it now. In reality, these may be scare tactics to try and get you to make decisions before you’re ready.

A reputable lender will want to make sure that you understand the process and feel comfortable with the decisions you’re making every step of the way. If your lender is rushing you, it may be a sign that you should look elsewhere.

Lack of Credit Check

Your credit is a vital part of the mortgage process, and any reputable lender will pull your credit score as part of their assessment of you as a borrower. If a lender doesn’t check your credit score or history, it may be because they’re not actually interested in whether or not you can repay the loan — all they care about is getting their hands on your money.

Telling You to Leave Blank Paperwork Fields

Another common tactic used by predatory lenders is telling borrowers to leave blanks in key areas of the paperwork, such as income or employment information. They may tell you that the underwriter will fill it out later or that it’s not important. In reality, this is just another way to try and get you to complete the process quickly without fully understanding what you’re agreeing to.

In many such cases, the predatory lender will go in after the fact and fill in the paperwork with whatever information they want, which may not be accurate. This can lead to a situation where you’re unable to repay the loan because it’s based on false information, and the lender can then come after you for the full amount of the loan plus interest and fees.

In part two of our series, we’ll go over further red flags that might indicate a predatory lender. For more on this, or to learn about any of our mortgage rates or home loan services, speak to the team at Primary Residential Mortgage today.

*PRMI NMLS 3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Opinions expressed are solely my own and do not express the views of my employer.