2023-02-07 19:37:50

CFPB Warns Consumers of Predatory Lending Practice That Can Cost Them Thousands of Dollars

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By The Motley Fool

Image source: Getty Images

Most people who want to buy a home can't swing that sort of purchase outright. That's what mortgages are for.

But choosing the right mortgage lender is crucial. This especially holds true today given that mortgage rates and home values are both up across the board. As such, you may be inclined to turn to an online platform for help in finding the right lender to work with on your home loan.

But the Consumer Financial Protection Bureau (CFPB) just issued a warning that some of the companies operating these online mortgage lender platforms may not be as objective as consumers might expect. And if you're not careful, you could be led astray.

When money pulls the strings

The companies that operate digital mortgage comparison platforms are supposed to match consumers up with lenders based on different criteria, including cost-savings for borrowers. Instead, the CFPB cautions that some of these platforms may be rigged to point borrowers toward lenders that pay them the largest kickbacks. So while you might think you're getting a non-biased recommendation when you search for a mortgage lender, the reality is that you may be getting paired up with a lender based on how much there is to be made at your expense.

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