According to the United States Attorney’s Office, “Predatory lending practices, broadly defined, are the fraudulent, deceptive, and unfair tactics some people use to dupe us into mortgage loans that we can’t afford.” An educated homebuyer, as well as laws that loan officers are required to follow, safeguards borrowers against predatory lending:
The mortgage lending landscape has changed a lot over the years as lawmakers seek to prevent losses like we saw in the Great Recession. The law requires certain consumer protection practices to help empower homebuyers with more transparency into the details of their mortgage loan. It is good to know what communications are required by law to ensure that you have all the information you need to make an informed and educated purchase. 
A good faith estimate, or ‘loan estimate’, is a list of settlement charges that the lender is obligated to provide the borrower within three business days of receiving the completed loan application. This estimate includes a breakdown of your loan specifics and lists the fees due at closing.
A good faith estimate is required by the Real Estate Settlement Procedures Act (RESPA). Once you are given your good faith estimate, review it and ask your loan officer about fees you don’t understand.
The Truth in Lending Act (TILA) was enacted on May 29, 1968 to protect consumers when working with lenders and creditors. Under this act, lenders must disclose the following items to borrowers before they are allowed to extend credit or financing to them:
SmartMortgage.com loan officers are committed to ethical lending practices to keep borrowers like you safe. We encourage you to ask questions about your mortgage and we are committed to providing you with the best possible experience.
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