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With the Fed's latest rate decision, many consumers may be back in the business to purchase a new home or refinance their existing home, in hopes of getting a lower interest rate. However, BEWARE, and don't forget that many of the problems in the market right now are caused by lenders who took advantage of past borrowers. Below are 10 common strategies that I have seen loan officers use in order to increase their commissions.

1- Unnecessary refinancing: The lender "Strips" homeowners' equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower. Unnecessary refinancing can quickly drain borrower equity and increase monthly payments -- sometimes on homes that had previously been owned free of debt.

2- They try to steer you into the wrong loan: An example of this is a lender trying to steer borrowers into sub-prime mortgages, even when the borrowers could qualify for a mainstream loan. Vulnerable borrowers may be subjected to aggressive sales tactics and sometimes outright fraud. Some have estimated that up to a third of borrowers with sub-prime mortgages could have qualified for loans with better terms. These lenders pressure borrowers to accept higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.

3- Abusive Prepayment Penalty: Borrowers with higher-interest subprime loans have a strong incentive to refinance as soon as their credit improves. However, up to 80% of all subprime mortgages carry a prepayment penalty (a fee for paying off a loan early). An abusive prepayment penalty typically is effective more than three years and/or costs more than six months interest. In the prime market, only about 2% of home loans carry prepayment penalties of any length.

4- Excessive fees - Dubious fees are costs not directly reflected in interest rates. While an origination point is common, discount points should only be used to buy-down the interest rate, not pad the commission of a loan officer. Because these costs can be financed, they are easy to disguise or downplay. Don't be afraid to ask the loan officer what he or she is making on the loan. If they are afraid to tell you, more than likely you are paying too much.

5-Knowingly lend more money than a borrower can afford to repay. Do not let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property.

6- They discriminate. They are knowingly charging higher interest rates to borrowers based on their race or national origin and not on their credit history. This is a crime, and while it should never happen, I have seen this be the case many times when doing refinances for people.

7- They Monopolize: A lender tells you that they are your only chance of getting a loan or owning a home. You should be able to take your time to shop around and compare prices and lenders. Shop for a lender and compare costs. Be suspicious if anyone tries to steer you to just one lender.

8- They pull a fast one at closing: The cost or loan terms at closing are not what you agreed to. Be sure to get a copy of a lock-in-agreement. If the loan rate changes by 1/8 % the lender must disclose to you the changes. Also, the lender must review your closing docs with you 24 hrs before closing. This way you can ensure you are getting what you are paying for.

9- Use high pressure sales tactics to sell you loans that you shouldn't consider: DO NOT let anyone persuade you to make a false statement on your loan application, such as overstating your income, the source of your down payment, failing to disclose the nature and amount of your debts, or even how long you have been employed. When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete. Lying on a mortgage application is fraud and may result in criminal penalties.

10- Has you sign documents with blanks. Never sign a blank document or a document containing blanks. If information is inserted by someone else after you have signed, you may still be bound to the terms of the contract. Insert "N/A" (i.e., not applicable) or cross through any blanks. Read everything carefully and ask questions. Do not sign anything that you don't understand.

In sum, throughout my lending profession I have seen many people suffer from the pitfalls of bad lending practices. I personally recommend doing your due diligence, and research before you look to refinance or purchase. This investment process should be enjoyable, and very simple. After all, it is usually your biggest investment you will ever make-don't let a lender spoil this moment by bad lending practices.

Chet J Wall is the founder of http://www.correctlending.com He founded this company based on correct lending principles. After years of scientific research Chet Wall, and software engineer Harold Madsen set out to create software that protects the borrower from the downfalls of mortgage lending. What they came up with was a proprietary algorithm that matches each borrower with the perfect loan. At http://www.correctlending.com borrowers use a sophisticated mathematical engine (Correct Loan Analyzer) that allows the borrower to answer 8 different questions, and receive an answer regarding which is the best loan type for them. There is also a paid version, that allows a borrower to take a more in-depth scientifically proven questionnaire that helps them make this decision.

After they receive their personalized report, Correct Lending prices out the loan, and then closes the loan for them. Borrower's are guaranteed the correct loan at the lowest possible price. It is a new way of lending that puts the borrower in charge, and allows them to get the perfect loan at the perfect price.