5 Forbidden Phrases in the Lending Industry - Page 2
“I'm a Gambler"
If you're a compulsive or habitual gambler, there is a more serious issue than needing a loan to help pay your bills or fund your addiction. Before applying for a loan you may want to seek assistance from Gamblers Anonymous. When you are prepared to submit your loan application, try not to spill your dirty little secret. If you have an outstanding gambling debt, that's something not included in your credit report that you never want to tell a lender and. Tell the lender exactly what the money will be used for—home repairs, credit card bills, groceries—but don't let them know you lost the mortgage payment playing craps.
“The IRS is Chasing Me”
Paying taxes is a task that makes most people cringe. If you have failed to pay your taxes, the government will contact you sooner or later. If you are applying for a loan to pay back taxes, the lender will be forced to deny your request for two reasons: First, the bank has no rights over the government. And second, if you owe money to the IRS you may be in risk of foreclosure or wage garnishment, which may prevent you from repaying the loan. Rather than applying for a loan, contact the IRS to discuss payment options.
The last thing you want to do is lie on your loan application. The federal government frowns upon fraud with fines of up to $1 million and thirty years in prison. The government has gone as far as establishing a special division within the Federal Bureau of Investigation—the Mortgage Fraud Task Force—responsible for tracking lender complaints against consumers and to pursue criminal investigations.
While I am not suggesting you lie to the lender—that is dishonest and a crime—consider all of your options before applying for a loan. Telling your lender that you are unemployed, a budding entrepreneur, or owe back taxes does not paint a picture of financial responsibility. Keeping your answers short and to the point—and your skeletons in the closet—will be far more beneficial.