Predatory Lending

Fraudulent Loan Practices



Con artists can cause you to lose your home or your life savings. You can protect yourself. Here's how.



Self-Defense Against Fraud!



In recent months there have been reports of unscrupulous operators who trick homeowners into signing for loans they cannot repay and then foreclose on the property. In some variations, the con artists persuade consumers to pay outrageous up-front fees and then never make the loan. Either way, a scam has been perpetrated.



Park State Bank wants to help you avoid getting caught in these scams. These tips can help you avoid huge problems, perhaps even losing your home:



ONE: SEE YOUR BANKER FIRST. Your banker knows the community and is best able to work with you to structure a loan that works right for you.



TWO: TAKE YOUR TIME. If someone offers to do home repairs and says he'll arrange the financing, tell him you'll accept only written bids with references from satisfied customers. Analyze all bids carefully, check references and ask another person you can trust - your banker, a member of the clergy or a relative or neighbor who has knowledge about financing - to help you review them.



THREE: GET ALL THE FACTS. Under current law you have the right to know the total cost of the loan, the annual percentage rate (APR), the amount of monthly payments and the length of time you have to pay back the loan.



FOUR: WATCH THE CLAIMS AND THE FEES. Beware of claims that bad credit or lack of credit is "no problem." Most legitimate lenders don't make this claim. Beware also of firms that ask for up-front application fees.



FIVE: READ CONTRACTS COMPLETELY. No legitimate lender will demand an instant decision, and people who try to rush things may be conning you. Don't sign any document without first carefully reviewing it.



SIX: MAKE SURE THAT THE LOAN FITS YOUR BUDGET. If the payment won't fit comfortably into your budget, don't accept it - especially if it might take away the roof over your head. If the amount of the monthly payment isn't fully disclosed in advance, and the interest rate too, don't accept the loan.