Were you the victim of Predatory Lending? Deceptive and predatory lending practices were all too common between 2001 and 2008, as the lawyers at CDA Law Center 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.
  
• f 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.