As part of its effort to fight predatory lending in Evansville, Ind., the Tri-State Best Practices Lending Committee drew up this code. It calls for mortgage lenders to:
- Protect all they deal with against fraud, misrepresentation or unethical practices of any nature.
- Adopt a policy that will enable them to avoid errors, exaggeration, misrepresentation or the concealment of any pertinent facts.
- Steer clear of engaging in the practice of law and refrain from providing legal advice.
- Follow the spirit and letter of the law of Truth in Advertising.
- Provide written disclosure of all financial terms of the transaction.
- Charge for their services only such fees as are fair and reasonable and which are in accordance with ethical practice in similar transactions.
- Never condone, engage in or be a party to questionable appraisal values, falsified selling prices, concealment of pertinent information and/or misrepresentation of facts, including the cash equity of the mortgagor in the subject property.
- Not knowingly put customers in jeopardy of losing their home, nor consciously impair the equity in their property through fraudulent or unsound lending practices.
- Avoid derogatory comments about their competitors but answer all questions in a professional manner.
- Protect the consumer's right to confidentiality.
- Disclose any equity or financial interest they may have in the collateral being offered to secure the loan.
- Affirm commitment to the Fair Housing Act and the Equal Credit Opportunity Act.
Bridges is a regular review of regional community and economic development issues. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.
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