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REALTOR® Emeritus |  | MORTGAGE BASICS | | ||
|  Keep the Transaction on Track Advanced Tip Advanced Tip Advanced Tip Broker Tip Getting to Close Advanced Tip Mortgage Basics Advanced Tip Advanced Tip Advanced Tip Inspections and Repairs Broker tip Closing Countdown Advanced Tip Going for the Close Advanced Tip Advanced Tip Advanced Tip Commission Disbursements Broker Tips Broker Tip Post-Closing Strategies Quiz: Contract to Close Bright Ideas: Contract to Close Code of Ethics: Contract to Close More Resources: Contract to Close | 5 Steps for Rejected Borrowers 1. Get the explanation for the rejection in writing. The federal Equal Credit Opportunity Act provides a form for lenders to use to explain to borrowers why they were rejected. 2. Know your credit score. Consumers are scored on a 900-point scale. Fannie Mae recommends lenders investigate borrowers with scores between 620 and 660 more thoroughly to see what caused the low rating. If a score is below 620, consumers may have to come up with larger downpayments or borrow at higher rates. 3. Try another lender. Lending practices vary from one institution to another; one lender may have a special program that fits your buyers’ profile. 4. Consider bias. If buyers are in a protected class under the Fair Housing Act , they may be able to appeal if they can demonstrate discrimination. Lenders also are prohibited from rejecting a loan application because of the neighborhood in which the property is located. This practice is called redlining. 5. File a complaint. If a lender’s explanation seems unsatisfactory, borrowers can file a complaint with the Federal Deposit Insurance Corporation or the U.S. Department of Housing and Urban Development. Adapted from “Been Denied a Mortgage? Take Steps to Find Out Why,” by Marilyn Kennedy Melia, Chicago Tribune, May 27, 2001. Reprinted with permission of the author. For the Advanced Salesperson: Recognizing Predatory Lending There’s no easy definition of what constitutes predatory lending. In some cases, subprime loans, loans made at a high interest rate because of a borrower’s poor credit, are justified. In other instances, subprime lending may grow out of abusive lending practices. Some clues that a buyer may be a victim of predatory lending include 1. Unnecessary services connected to the loan that have no benefit to the consumer. 2. Mischaracterization of the loan’s terms and conditions. 3. Deceptive disclosures of balloon payments. 4. Excessive prepayment penalties. If any of these actions occur during the mortgage application process, suggest that the buyers look elsewhere for a loan. Avoiding Application Problems > | |