Are You a Victim of Predatory Mortgage Lending?
You obtained a loan from your bank to purchase a house believing that you would be able to pay the mortgage payments…and then the interest rate adjusted…and the increase to your payments is so high that there is no way you can make your payments.
Predatory lending can leave customers homeless and without hope. The definition of predatory is that one party usually comes out on top – and it is not the homeowner!
What was once unthinkable has become common occurrence today. More and more people are losing their homes, not just because of decreased earnings, but because their brokers or bank loan officers were too busy promoting loans designed to put the homeowner at a disadvantage!
You May Be a Victim of Predatory Lending
How do you know if you have been a victim of predatory mortgage lending? Here are some of the red flags you should be aware of:
- Loan flipping: frequent refinancing that results in little economic benefit to the borrower, but is done for the objective of generating additional loan fees!
- Refinancing of special subsidized mortgages, resulting in the loss of beneficial loan terms
- Negative amortization: makes it more difficult or impossible for borrowers to reduce or repay their loans
- Inadequate disclosure of the true costs, risk and appropriateness to the borrower of the loan transaction
- Excessive prepayment penalties resulting in borrowers staying in bad loans. This is the fee to the borrower who wants to pay the loan off early. The prepayment penalty can be so high that the borrower loses equity in the house and can even cause the borrower to have to pay money out of pocket–particularly with today’s market being so depressed
- Excessive fees: When refinancing, often there are excessive and unnecessary fees
- Kickbacks to brokers: When brokers deliver a loan with an inflated interest rate, the lender often pays a kickback also known as a “yield spread premium,” making the loan more costly to the borrower
- Targeting minorities and the elderly: Targeting the elderly or minority
homeowners to refinance or obtain loans that are not in their best interest and who would in actuality qualify for traditional financing
- Mandatory arbitration: The lender puts disclaimers in fine print that the homeowner can’t take legal action against the lender. In essence, the borrower is signing away all right to sue the lender in the event of fraud or predatory lending, leaving the borrowers only the right to take their actions to arbitration–while often the lender reserves the right to go to court
We fight for the rights of homeowners against predatory lenders–and we want to fight for YOU.
Don’t Let the Bank Take Your Home!
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