North Carolina: Protecting Your Mortgage

By AJ Fanter
Local Lender Columnist
Oct 6, 2006
According to the Center for Responsible Lending, in 1999 North Carolina became the first state to make predatory mortgage lending illegal. This important mortgage lending law, which protects those taking out new home loans as well as those seeking to refinance, has proven to be quite effective.

The CRL reports that the North Carolina Predatory Mortgage Lending law has not only reduced predatory mortgage lending, it has preserved "a strong subprime lending market." Predatory lending costs U.S. consumers roughly $9.1 billion every year, which is why many look to North Carolina's success.

Not only does the law end abusive prepayment penalties, which trap those with new home loans into high-cost payment plans, it stops the financing of excessive fees and eliminates kickbacks to mortgage brokers for "steering" those who need a new home loan towards a particular lender.

Saving North Carolina Citizens

The reduction in predatory lending isn't the only benefit North Carolina residents have experienced. The Center reports that during just the first year after it was passed, the law saved citizens roughly $100 million.

In addition, the North Carolina law stops the abusive refinancing tactic known as flipping, and ensures that homeowners get ample opportunities to stop foreclosure-- regardless of whether or not their loan has been sold. The law also has provisions for protecting anyone that must take out a high-cost loan by requiring them to take a class prior to receiving a new home loan.

If you live in North Carolina and are ready for a mortgage, it's good to know that the state is helping to keep you safe!

Source:
The Center for Responsible Lending

About the Author
AJ Fanter is a freelance writer based in Reno, NV.