The Florida Fair Lending Act, Chapter 494, Florida Statutes, prohibits predatory tactics on high cost home loans, including:
* Charging prepayment penalties for longer than three years
* Increased interest on loans going into default
* Balloon payments on loans that mature in less than 10 years
* Extending credit regardless of a borrower’s ability to pay
* Making direct payments to home improvement contractors
* Calling a loan due even though the borrower has complied with the terms of the loan
* Refinancing a loan during the first 18 months, unless there is a benefit to the borrower
* Offering to originate a loan at the borrower’s home without a prearranged appointment
* Charging late fees that exceed five percent of the payment
The law also requires lenders to disclose certain facts about the loan at least three days prior to closing the deal, including:
* A mortgage will be placed on the borrower’s home, and they could lose the home in the event of foreclosure.
* Interest rates and terms can vary, depending on the lender or broker.
* Borrowers should consider consulting a HUD approved credit counseling agency or a financial advisor regarding financing of their home.
* Debt consolidation can be a useful tool if the borrower does not take on additional short-term debts.
* Loan applicants do not have to accept the loan, even though they have filled out an application.