Vision.       Strategy.       Results.
helping you reach unprecedented levels of success


Mortgage Borrower’s Bill of Rights
By Julie Piepho as published in the Northern Colorado Business Report

Your home is important to you and your family. That’s why the Mortgage Bankers Association of America along with the Colorado Mortgage Lenders Association is working to protect you from deceptive and fraudulent sales tactics when taking out a mortgage or a home equity loan.

One of the first and important steps you can take to protect yourself from deceptive and fraudulent lending practices is to understand the rights you have as a consumer when borrowing money to purchase, refinance or renovate a home. If you are told by a lender you don’t have these rights, then you should seek additional information before making any decisions.

“A Borrower’s Bill of Rights”

• A borrower has the right to clear and forthright explanations of the terms and conditions of the loan.

• A borrower has the right to timely and truthful disclosures regarding the rates and costs of the loan.

• A borrower has the right to accurate disclosure of final annual percentage rate and amount of regular payments at the time of loan closing/settlement.

• A borrower has the right not to be subject to deceptive marketing practices.

• A borrower has the right to obtain credit counseling prior to closing on the loan.

• A borrower has the right to have a lender consider a borrower’s ability to repay the loan before such credit is extended.

• A borrower should receive a tangible benefit when charged a fee or a higher interest rate to refinance a loan.

• A borrower the right to not be subject to a requirement that he or she finance any portion of points or fees.

• A borrower has the right to decline credit insurance in connection with a loan.

• A borrower has the right to a fair and equitable resolution to any disputes related to their loan.

• A borrower has the right to have favorable information reported to credit bureaus on a timely basis.

The majority of mortgage lenders want you to purchase or a refinance your home utilizing credit you can afford. These lenders operate within strict laws and regulations that govern the mortgage industry. They will spend time with you so you can understand the process of being approved for a mortgage loan. All responsible lenders will discuss with you the Borrower’s Bill of Rights and answer satisfactorily any concerns you may have.

If a lender is unwilling to resolve your concerns, you have several different options you can choose. First, you can call another mortgage lender and have them answer your questions and obtain your mortgage financing from them. Secondly, you can call Colorado Mortgage Lenders Association Consumer Help Line and qualified personnel can assist you with questions or concerns regarding the mortgage process. Their toll-free number is 800-611-4830. Lastly, you can send an email to the Mortgage Bankers Association of America’s website at

The Colorado Mortgage Lenders Association and the Mortgage Bankers Association of America want the consumer to have access to fair and honest lending practices. They will not allow a handful of deceptive lenders to discredit the majority of the nation’s mortgage bankers who have a history of fighting housing and lending discrimination.

“The Ten Warning Signs of Predatory Lending”
The questions below are a good way for you to know if someone could be misleading you about a loan and its costs to you. Just because you answer “yes” to these questions does not mean you are or have been a victim of predatory lending. But, if you answer “yes” to some of the questions, we recommend you contact either the CMLA Consumer Help Line or send an email to the MBAA’s web site, as mentioned above.

1. If you have a balloon loan (one in which after a series of loan payments the entire loan balance is due in a large lump sum), will you need to obtain another loan to finance that final lump-sum amount?
2. Were you required to buy credit insurance, insurance that will repay the debit if you die or become disabled? (Note: credit insurance is optional and will not affect your loan decision if you decline to buy it. It can, however, add considerable cost to the loan transaction. You should decide whether you are going to purchase credit insurance carefully.)
3. Have you refinanced your loan several times, and in each instance increased either your monthly payment and/or the total amount you owe on your home?
4. After settlement, were you surprised to find that the monthly payments on your mortgage loan were higher than you anticipated based on the initial disclosures?
5. Did you incur any unexpected costs at settlement that were not explained to you prior to the settlement?
6. Were you asked to leave signature lines or any other important line item of any form blank? Did the lender or broker alter any information you entered on your loan application?
7. Check your loan file. Are any of the following disclosures missing?
a. Good Faith Estimate
b. Special Information Booklet
c. Truth in Lending
d. HUD-1 Settlement Statement
8. Do your documents reveal that your interest rate calculation will change to
require you to pay “daily interest” in instances when your payments are
9. Is your loan amount on the loan you obtained higher than the value of the
10. Were you encouraged to include false information on your loan application?

Consultation services in the fields of leadership training, personal development, project management and mortgage procurement. milestone
      © 2014 milestone leadership consulting