Predatory lending is target in seminar

Representatives from the U.S. Department of Housing and Urban Development will be coming to Cape Girardeau this week to inform residents of the danger of predatory lending practices.

Those HUD representatives will join a group of local lenders and real estate agents to put on a presentation in the Lincoln Room of the Drury Lodge on Thursday.

Sandy Schooley, president of Best Mortgage and Financial Group Inc., is one of the local organizers. She said the aim of the presentation is to educate the public about unethical practices being used during the purchase or refinancing of homes.

"These people are preying on people who need the money and will listen to whatever a loan officer tells them," Schooley said. "We want people in this area to know what to watch for."

Schooley said often loan officers at mortgage companies will tell customers that they're high risk, when in fact they are far from it. Then mortgage lenders charge them a higher interest rate and higher closing costs.

Another recurring problem is mortgage companies that charge borrowers extra percentage points on their loans when the companies are already receiving a service release premium from a lender. A service release premium is a fee from a lender to a mortgage company for originating a loan.

In this case, mortgage companies are playing both sides, and Schooley said this unethical practice can lead to borrowers paying $6,000 to $7,000 more.

"If people are desperate, they're going to trust that I know what I'm doing," Schooley said.

The session will begin at 7 p.m. and will involve a presentation and a question and answer session. It is open to the public and refreshments will be served. For more information, call Schooley at (573) 334-9900.

trehagen@semissourian.com

335-6611, extension 137