Beware of Those Fine Print Gotchas

The following question and answer were posted on a large mortgage lender's web site.

  1. "Do I need to know anything about the mortgage loan process before I apply?"
  2. "No. Not only is our process very simple, but our web site is full of useful information to help guide you through it. And you can always call our toll-free number to seek further assistance along the way."

Now, compare that statement with a Wall Street Journal article (September 6, 2002) headlined "Citigroup May Pay $200 Million in Fines for Predatory Mortgage Practices." The Journal further reported, "Federal Trade Commission (FTC) allegations have been hanging over the company and have provided ammunition for critics of Citigroup's practices. . . . Indeed it isn't likely that this record settlement will cool off the consumer advocates who continue to complain that Citigroup's practices haven't improved to adequately protect borrowers."

Eventually, Citigroup did pay—but the fine levied was $400 million, not $200 million. You might think that fines of that size would jolt mortgage lenders into walking the straight and narrow. But it hasn't happened yet. Since 2002 (when I wrote the first edition of Mortgage Secrets), deceptive loan practices, overcharging, and mortgage fraud have multiplied far beyond my warnings and expectations. Without a doubt—good credit or bad credit—the creditors are stalking you.

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