Among the areas of concern highlighted by the site:
- No-skip rules. Lenders offering VA-backed Interest Rate Reduction Refinance Loans are not permitted to advertise the ability to skip payments as part of their sales pitch.
- Cash-back claims. Lenders promising big money at closing likely will pull these funds from existing escrow accounts. The figures cited in advertising materials may not match the reality of your existing loan.
- Really low rates. Predatory lenders may not explain that the low rate being advertised is an adjustable one, which will go up over the duration of the loan. As with most advertisements, if the number seems too good to be true, it probably is.
McCaskill is not the first lawmaker to target such refinance offers. In January, Sens. Thom Tillis, R-N.C., and Elizabeth Warren, D-Mass., introduced bipartisan legislation designed to prevent predatory loan practices by requiring lenders to specify their product’s financial benefit for the borrower, among other regulations.
Borrowers who feel they’ve been scammed also can submit a complaint to the Consumer Finance Protection Bureau via its website.