The Kansas City Regional Association of Realtors recently placed an informational article in the KC Star.  This can be seen here. It is supposed to show how to avoid "predatory lending", however there a several key points that are not discussed.  We list them as follows:

1.  Excessive Fees - This is common, but nobody ever tells a borrower what the ranges of fees for borrowers are.  In addition, there is no encouragement to a borrower to price the loan with several lenders.  We believe that in any major transaction such as a home loan (or purchase or sale of a property) that the client should ask several lenders what programs they offer. 

2. No TIL of GFE given at the time of application - The lender is required to provide a potential borrower with a copy of the loan application, credit report, Truth in Lending (TIL), Good Faith Estimate (or GFE, the cost to close on a loan).  These documents are required by law, however Scum Lenders will not give this to an applicant as this will empower the borrower to shop around very efficiently.  We encourage the borrower to get all the information from the first lender they discuss the loan with and then shop around to other lenders to get the best deal.  Our advice: show the income, credit score, loan amount, date of closing, and other information (never the TIL or GFE) to a potential lender - NEVER give a copy of the GFE or TIL, because the "new" lender will only beat it by a little bit, instead of offering you the best deal. 

3. Ask your real estate professional for advice - No realtor can promote (or steer) a borrower to a lender (possible conflict of interest), however a good realtor can advise a client of how fair a loan is for a client's particular situation.  We work closely with all of our clients to ensure that they are treated fairly when they are seeking financing for their home.  We will not recommend a lender, just the loan possibilities and structuring based on the needs of our clients. 

4. There are many questions in the article that are simply filler for the space.  These are a waste of time for the borrowers (and insulting as most borrowers are quite financially sophisticated) but also add no value to a borrower because there is NO measurement given to judge the fairness of the answers.  We work directly with our clients as today's lending environment is quite tenuous and the lenders are able to exploit borrowers (and any ignorant advisor) in financially volatile times.

Signed,

Robert Mirich - Owner & Supervising Broker

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