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Predatory Lending-who Can you Trust?

Wed, 15 Jun 2011 13:37:53 +0000

Your Guide to Understanding Predatory Lending Laws & How to Report Mortgage Fraud

Thu, 04 Nov 2010 19:16:21 +0000

There are lending practices that are abusive and predatory in nature. How can you identify these? Below are questions that could help you determine fraud in lending. If you answered “yes” to any of the questions, contact the appropriate agency/agencies.

The information below will help you better determine if you have been a victim of mortgage fraud or predatory lending.

Have You been a Victim of Mortgage Fraud?

Indications of Predatory Lending

Where you not given a copy of any of the following disclosure agreements?

Note: Credit insurance is optional and should not be imposed to borrowers. You must decide carefully whether you are going to purchase credit insurance because it considerably affects the cost of the loan transaction.

MBA and its fellow supporters actively fight to control, if not eliminate, predatory lending. In fact, borrowers are being made aware that there is a Borrower’s Bill of Rights. This gives the borrowers some form of protection against predatory lenders.

Federal Predatory Lending Laws The following are laws now in effect at the Federal Reserve that gives you rights on certain issues during the closing process:

Real Estate Settlement and Procedures Act (RESPA)

This requires disclosure of mortgage processing transactions and other fees that could affect the cost of settlement services. It is a consumer protection statute, enforced by HUD, that aims to make consumers well-informed in the home buying process.

Truth in Lending Act (TILA)

Enacted under the Consumer Credit Protection Act in 1968, which requires creditors to disclose information to consumers in relation to why they are being charged, what for, and how much.

State Predatory Lending laws Predatory lending laws can vary from state to state. Know the laws in your area that protects consumers against abusive lending practices like excessive fees and rates. High fees may compromise pre-payment penalties and credit life insurance.

List of fraudulent home loan modification practices Desperate home owners would potentially jump to every opportunity to get a mortgage modification to avoid being kicked-out of their homes. It is not surprising, that over-promising practices will start to occur and loan modification companies will take advantage of homeowner’s vulnerability.

Your Guide To Detecting Loan Modification Fraud

Be alert. Remember that the official place to go for mortgage modification services is the governments Making Home Affordable website. You can find information related to the mortgage modification process. In reality, fraud does not only occur in mortgage modifications. Oftentimes, it starts from the moment a borrower shops for a loan.

Predatory Lending

Tue, 13 Jul 2010 01:20:10 +0000

Were you the victim of Predatory Lending? Deceptive and predatory lending practices were all too common between 2001 and 2008, as the lawyers at www.ConsumerDebtAdvocate.net find over 90% of all loans we perform a forensic analysis on have multiple violations. If you took out a new mortgage loan during this period of time it is highly likely that there were violations in Truth in Lending, RESPA, Section 32, or Regulation Z. Even the best educated consumers may have been victims of predatory lending practices. CDA’s Attorney’s offer a complete forensic analysis of your loan documents by a recognized expert in the field who has over 30 years of experience helping consumers. CDA uses the results as leverage to force your lender to restructure your loan terms, or as an alternative, suing to challenge the validity of the loan itself. If you win a predatory lending case in court, you will often receive your home’s Deed free and clear, plus be re-paid all payments and fees you have made from the time you took out the loan.

Common Predatory Lending Practices:

? Predatory lenders use deceptive or aggressive practices to sell their loans, often targeting certain neighborhoods? Predatory lenders strip equity form homes through excessive fees without considering the borrower’s ability to repay the loan, sometimes resulting in foreclosure? Predatory lenders use prepayment penalties and adjustable loans that increase without regard to market conditions.? Predatory Lenders offer you one rate and fee structure, but change the loan terms at the last minute without proper disclosures.? Predatory lenders may use Spanish speakers to gain the trust and confidence of Hispanic Homeowners.? Predatory lenders charge excessive fees, points, and interest rates.? If you did a “stated income” or “stated asset” loan, you likely were the victim of mortgage fraud.? If you are elderly (over age 65), you may also be the victim of Elderly Abuse.

Common Indicators of Predatory Lending:

Excessive Points, late charges, and pre-payment penalties: Loan origination fees and other charges can cost many thousands of dollars, even if your were promised a “No Fee” or “No Charge” loan. Pre-payment penalties may make it very expensive to refinance or sell your home.

High Interest rate: Victims of predatory lending pay a higher interest rate than the national average or pay an interest rate not commensurate with their credit score.

Asset-based Lending: Rather than receiving a loan based upon your ability to repay the loan, you were given a loan based on how much equity you had and were able to pull out or pay as fees. You may have been encouraged to “inflate” your income or it was done without your knowledge so your could “afford” the loan. They may lend you more than you could afford to repay, as the lender would get the full amount of equity if they foreclosed on your property even if the loan was small.

Misrepresentations: The loan officer may offer you one set of terms (including rate and fees) and then change them at closing. They may also misrepresent the terms such you signed.

Balloon Payment: A large sum of money due at the end of the loan that is often beyond your ability to repay, often causing you to lose the home. IT is also illegal in sub-prime loan under HOEPA regulations.

Discrimination: The lender charges a woman, older adult, or minority consumer more than a similar consumer who is not a member of that group.

What Can You Do?

There are several important documents you should have received as part of the loan process to better help you understand your loan. Three days before you signed loan documents your lender must have provided you with a Good Faith Estimate that should outline your rate and fees. At closing, compare this to the Settlement Statement or HUD-1. It tells you where all the money you are borrowing will go. If there are any differences between the Good Faith Estimate and the HUD-1, make sure you agree with them before you sign.

You should also study the Truth in Lending disclosures which detail how much you are paying for your loan, what the percentage rate and APR is, and what you will owe at the end of the loan. Also review the contract to determine if there are prepayment penalties that lock you into the loan for a pre-determined period of time. IF you feel you were a victim of predatory lending, it is critical you get a forensic review of these documents before the statute of limitation runs out. Some violations can restart the rescission clock and you will have up to three years from the time you discover the violations to address them.

What can be done about predatory lending practices in the student loan industry?

Sat, 06 Mar 2010 19:13:41 +0000

More and more students are graduating with loads of debt from “private lenders” (ex. Sallie Mae, Wells Fargo, Xpress Loans) who make loan terms unclear, and repayment plans ambiguous. These loans can rarely be consolidated, have high interest rates, are non-dischargable in bankruptcy, and have very high payments. Congress is realizing that something must be done to alleiviate the burden on the students that fell victim to these lending practices by the banks. What remedies do you think should be allotted these students? How do we fix problems within private lending so students can pay their loans while still maintaining a decent quality of life?