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Joplin Handles Housing: Getting a Home Loan
>>AMY SUSAN: Hi. Amy Susan, Director of Communications for the Missouri Department of Labor. On this week’s edition of Labor Talk we’re here in the City of Joplin nearly three months after the devastating tornado ran through the city. I’m joined here with Sheryl Rose. She’s the Regional Manager with Missouri Commission on Human Rights, as well as Andy Falls. He’s a Vice-President of Southwest Missouri Bank here in Joplin. And we’re here to talk about predatory lending, housing discrimination and mortgage fraud when people are now rebuilding homes, looking for places to live and coming to banks to, again, get loans to buy those homes. So, Sheryl, can you first explain to us what predatory lending is?
>>SHERYL ROSE: Well, predatory lending is the making of unsuitable loans that target vulnerable and inexperienced borrowers. It’s basically a loan that someone can’t afford to repay.
>>SUSAN: Why is it more of a problem, or more prevalent, during times of natural disaster?
>>ROSE: Well, during a time of natural disaster when there’s a housing shortage and a lot of people are needing loans and housing, it’s just a time when people can take advantage of folks.
>>SUSAN: Who are likely targets of predatory lending?
>>ROSE: Well, anybody can be a target of predatory lending but typically it’s people who are low income, might be first-time homebuyers, minorities, women, people with disabilities; people who don’t have a lot of experience or information about the loan process.
>>SUSAN: Now, Andy, I’m going to talk to you a little bit to gives us the bank’s perspective. Have you ever interacted with customers that you had a conversation with them and thought, maybe at the end of the conversation, they may have been scammed or could have potentially become a victim of predatory lending?
>>ANDY FALLS: When someone makes an application and they’ve been turned down by another lender, we always ask why and sometimes when they tell us the reason why they were turned down, it doesn’t make sense and we think maybe the other lender was being discriminatory or is not following fair housing acts or housing practices.
>>SUSAN: What tips would you have for your customers or even potential customers on how to avoid becoming a victim?
>>FALLS: If you have an established relationship with your lender, you’re a lot less likely to be taken advantage of, so I think the first important thing is to see your local lender and also you need to take advantage of what’s available information, being an informed borrower.
>>ROSE: Anytime there’s anytime there’s hidden fees; fees that people don’t know about until closing, you get to the closing, to the bank, and you’ve got your moving van out front and all of a sudden you’re hit with these high fees that you didn’t know about and you’re really stuck because you got to move.
>>SUSAN: What should consumers look for in finding a reputable lender?
>>FALLS: You know, one of the things is if someone offers to make a loan that seems too easy because they don’t want an appraisal done, that should be a warning sign because a cautious lender is going to want an appraisal to make sure the house is worth what you’re paying for it and if someone is willing to make a quick, easy fix, it’s usually going to cost you in the long run.
>>SUSAN: Why is it important for an area that was hit by natural disasters, such as Joplin, for everybody to be mindful and to be educated about their housing rights when it comes to getting a home loan?
>>FALLS: Predatory lending or mortgage fraud can cause a quick increase in prices, which will later come back to haunt everyone. If you have an increased number of foreclosure then it only causes greater depression so you want a strong, steady economy and that causes all sorts of problems if you don’t have that.
>>SUSAN: So tell us, Sheryl, what can someone do if they feel as if they have become a victim of predatory lending, housing discrimination or mortgage fraud?
>>ROSE: If they are a victim of discrimination--in other words, that they’ve been targeted or discriminated against because race, sex, religion, national origin, disability or family status, they can file a fair housing complaint with our agency. If they have been a victim of predatory lending, they may be able to get assistance from a certified HUD counseling agency or they may need to go to a private attorney to get representation.
>>SUSAN: Well, thank you both for joining us today to give us some helpful tips on how to avoid becoming a victim and for educating us about our rights. If you all have any other questions or comments, or concerns, you can visit labor.mo.gov. Click on News and Notices and then click on Labor Talk Podcast.