In 2000, over 71 million Americans owned their own home, more than any time in American history. With the start of the Mortgage Lending boom in 2001, this number grew significantly as lenders devised subprime financial instruments and loans to allow more and more borrowers who otherwise would not qualify for a loan. These new homeowners not only did purchase loans to get into their first house, but then refinanced over and over again as their property values went up. This problem was exacerbated as lender came up with more Adjustable Rate Mortgages (ARMs) that had low teaser rates. With this massive demand for more loans, people flooded to the mortgage industry and complex loan programs and a myriad of regulatory issues that include Predatory Lending, RESPA, Truth in Lending (TILA), Regulation Z, and other state and federal laws, were being explained and followed by mortgage sales people with little experience or understanding or mortgage compliance law. As such, over 90% of all mortgage loans from 2001 to 2008 contain major or minor Predatory Lending or Truth in Lending violations that could impact the validity of the mortgage note. According to Robert Scurrah, Attorney for Consumer Debt Advocate ( www.CDAALawCenter.com ). We perform a comprehensive Predatory Lending analysis on every client coming through our door who is also looking for a loan modification. In almost 100% of the cases, we find violations in RESPA, TILA, and in some cases, egregious Article 32 Predatory Lending violations. Quite often, it’s a failure to disclose the actual interest rate and APR in the good faith estimate, as the terms of the loan changed from when it was quoted to when it was signed by the borrower and proper disclosures were never sent. This puts the very validity of the loan in question and we leverage this information to force the banks to restructure the loan terms to a lower rate and payment, and sometimes even reduce principal balance, effectively lowering what is owed on the property. Many people are struggling with very high interest rates they never knew would be coming when their loan adjusted, and we help save those homes from foreclosure. When we provide our clients with the Predatory Lending analysis of their loan, they are aghast at how many violations there typically are and some use this info to sue their lender. Why do lenders become open to a loan modification when there are predatory lending violations? It’s simple, because if the case goes to litigation and the lender loses, they not only give the home back to the consumer free and clear, but also have to pay back every payment made by that consumer as well as any fees paid while originating the loan. The net effect is the consumer gets their home free and clear if they win in court. Lenders know the State and Federal laws are so clear, they do not have any chance to win if the violations are clearly documented as it is not open to interpretation, rather it is black and white. With almost every loan between 2001 and 2008 containing some Predatory Lending issues, the Mortgage Banks will have a long tough road ahead dealing with Loan Modifications and Predatory Lending litigation.