Predatory Lending

In the past, just about anyone could get a loan through either a full documentation (full doc) or a no documentation (no doc) process.

With the Minnesota anti-predatory lending laws that took effect August 1st, lenders must verify a borrowers ability to re-pay. Some of the key points are as follows:

• added steps to prevent lenders from refinancing borrowers where there is no need to refinance


• pre-payment penalties are strictly curtailed


• mortgage originators are licensed by the state and must maintain a level of assets or be bonded


• mortgage fraud is specifically a crime

These laws were put into place to help consumers. Some smaller mortgage companies closed their doors as a result of these laws but getting a mortgage is still relatively straight-forward and now, even safer!