LEGAL GUIDE
Written by attorney Allen D Butler | Nov 3, 2011

Are You a Victom of Predatory lending?

Are you the Victim of Predatory Lending?

Your loan is possibly unlawful, and you may be entitled to substantial damages whether or not you're currently in foreclosure.

The penalties for failure to comply with the Truth In Lending Act can be substantial. A creditor who violates the disclosure requirements may be sued for twice the amount of the total finance charge on the loan. In the case of a home mortgage, this can be a very significant amount. Costs and attorney's fees may also be awarded to the consumer. A lawsuit must be begun by the consumer within a year of the violation, but certain tolling provisions apply giving the consumer more time and up to 3 years to file suit.

These laws are in place to protect you, the homeowner, the American people, but yet some mortgage brokers and lenders act as if it's the wild, wild west. You need to become educated and take the law into your own hands or hire a lawyer.

If you are in foreclosure, the Truth In Lending Act can stop the foreclosure process immediately. If you're a victim then don't be a victim twice and let them take your home. Fight for your rights.

Predatory lending is a hot topic in the news and there is a good reason why. Lenders and brokers have spent the last few years taking advantage of home owners by providing teaser rates and pay option loans. The lenders and brokers knew these loans were too good be true, and the borrowers weren't told the truth.

This term can apply to all aspects of the mortgage industry and refers to the practice whereby a creditor put a borrower into a loan that the borrower will probably not be able to repay. Federal laws like the Truth In Lending Act ("TILA") and the Real Estate Settlement Procedures Act ("RESPA"), as well as many state laws, require that creditors disclose certain terms of loans to borrowers, and when those terms are not disclosed or are inaccurately disclosed these laws provide severe monetary penalties against these creditors.

The Truth In Lending Act ("TILA"), and the Real Estate Settlement Procedures Act ("RESPA") are violated daily by lenders and predatory lending victims are everywhere. These laws are in place to protect you, the homeowner, but yet are often completely disregarded.

Your loan is probably unlawful, and you may be entitled to substantial damages whether or not you're currently in foreclosure.

Bait & Switch

Predatory lending tactics like the classic bait and switch. You're sold on the phone by a smooth talking loan officer who pitches you a great rate. Things move quickly and when you go to sign your loan documents with a notary, that great rate isn't so great anymore.

Elder Abuse

Elder abuse is really common because retirees often have a large amount of equity in their homes, they are prime targets for greedy and crooked creditors. We have seen mortgage sellers cold call elderly homeowners and then scam them into a loan which they do not need, can not afford, and which provides the seller with an incredibly large commission.

Both federal and state law prohibit the mortgage industry from providing different loan terms to people based on race, sex, ethnicity, or other protected class. Such a transaction may be subject to a cause of action under the Unruh Civil Rights Act or other law.

Equity theft also called equity skimming, refers to the situation whereby the same creditor refinances the same property with the same borrower multiple times and uses the equity in the borrower's property.

Additional resources provided by the author

Additional information available at: en.wikipedia.org/wiki/Predatory_lending and hud.gov/offices/hsg/sfh/pred/predlend.cfm

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