Do you believe you the victim of Predatory Lending or is someone telling you that you were?  Deceptive and predatory lending practices were all too common between 2001 and 2008, yet the statue of limitations to pursue litigation most likely expired after three (3) years of the origination date of your loan. Californians have been warned by both the Attorneys General and the Federal Trade Commission to avoid Forensic Loan Audit Scams which are typically perpetrated by Mortgage or Real Estate licensees. Remain skeptical of anyone who offers to sell you a Forensic Loan Audit, as it is most likely a scam. These scam companies may entice you to retain their services by telling you that you will “get your home for free.” Be very skeptical of this advice as the right of recission actually requires you to pay back the loan in full. Be wary of Class Action or Mass Joinder Lawsuits that require large monthly legal fees, as many of them are without merit. Be sure you speak to the attorney leading the case, as we have found many non-attorneys “selling” lawsuits” in violation of the law. If you believe you were scammed by one of these services, please report the company to their state’s Attorneys General or to the Federal Trade Commission. CDA Law Center proudly works with the California mortgage task force through our attorney relationships in helping close down perpetrators of foreclosure relief or predatory lending fraud, so please let us know if you have been defrauded by a company. If your loan is more recent and falls within the statue of limitations period, we offer Forensic Loan audits in specific cases for $995, and the audit is performed by a licensed investigator with over 30 years of experience and who is an expert witness in legal cases. Notably, our auditor is an expert witness in Predatory Lending cases. We believe the “Predatory Lending” path is not justified except for a limited number of our Clients.
Common Predatory Lending Practices:

• Predatory lenders use deceptive or aggressive practices to sell  their loans, often targeting certain neighborhoods
• Predatory lenders strip equity from 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 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 you 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 may 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 so you 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 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 help you understand your loan.  Three days before you sign a loan document, your lender must provide you a Good Faith Estimate that should outline your rates 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 the loan documents.

You should also study the Truth in Lending disclosures which detail how much you are paying for your loan, the percentage rate and APR, 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 legal opinion regarding 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. The best thing you can do is avoid problems altogether by doing your research and understanding the loan terms and disclosures prior to signing the loan documents.