We do have predatory lending in Texas. Since there have been indictments and convictions in some other cities in Texas, I think it is fair to assume that there will be some in San Antonio. Mr. Sitea gives four examples, three of which do not make much sense in Texas.

Number 1, about the title fees, they are set by the insurance commissioner and your loan company may require certain “exceptions” be retained, and maybe these can be negotiated, but not the basic policy.

Number 2 talks about the appraisal with pictures of the inside of the house. I can not recall ever seeing a residential appraisal (for purchase or refinancing) that had pictures of the inside of the house. In fact, to my knowledge, the only reason appraisers go inside the house is to evaluate the condition, verify the rooms, and that there are not some surprises inside that effect the value.

Number 3 is getting to the meat of the predatory lending. The bad lenders are getting you the loan, but charging all sorts of fees, which they put in the loan because you do not have the cash at closing. Thus, we have seen 100 percent plus loans on property which might have an inflated appraisal in the first place.

Tip Number 4, about prepayment penalties: FHA and VA loans do not allow penalties, so that leaves conventional loans. Since I have not seen these penalties recently, and I have not had clients take out variable rate mortgages, I am thinking that is where the penalties are, because the early pay-off would make the potential for the profit on over market interest rates on the loan, go away. I would say, “Beware on-line financing” (re-financing) unless you are very, very astute to the fine print real estate financing.

In closing, Mr. Sitea states that “blindly trusting loan officers or bankers can cost the homebuyer... well maybe that is why you should use be best realtor you can find, because maybe the realtor can just help you avoid all the land mines.

John J Kuntz III