Predatory Loan Help

What is Predatory Lending?

The real estate bubble that just recently burst was fueled by many things.  One factor was historically low interest rates.  Another was a constant shifting of the risk mortgage companies managed to pull off when lending to buyers.  There were a lot of ways this was done, and one of the buzzwords you often hear is “bundled mortgages.”

Bundled Mortgages

“Bundled mortgages” came into being when Lenders pooled the promissory notes, that is, the IOUs, of many mortgages together into one bond to sell in financial markets.  These bonds had a theoretical value based on what everyone (all the mortgage borrowers) was supposed to pay back over time.  These bonds were then sold to other banks, investment brokers, Fannie Mae, and Freddie Mac.

NINJA Loans

The ability to “share the risk,” in other words, sell a mortgage that would normally have a higher risk of default, to other banks and to the public at large, drove lending standards lower.  The mere existence of “ninja” loans, i.e., loans made with No-Income-No-Job-no-Asset verification should have been a HUGE red flag to everyone.  The rationalization at the height of the housing price bubble was that anyone could “flip” a house in a short time frame and make a lot of money.  In fact, the housing market conditions supported the self-deceiving idea that anyone could sell any house at any time.

There never seemed to be any actual “risk” to writing mortgages.

Everyone in the mortgage-originating business was making a lot of money during the boom.  The refinance segment of the business also boomed, with historically low interest rates driving this market.

Banks and mortgage brokers got more and more “creative” with payment options and types of loans to lend to more and more people…

Lending Laws

As it turns out, banks and mortgage brokers actually broke existing laws as they squeezed more and more money out of “the market” during this frenzy.  They offered loans with ridiculous penalties and terms.  They offered adjustable mortgages to people who could afford payments under the initial interest rate, but had no hope at all of being able to afford the mortgage after the rate adjusted.  They lent to people with too much outstanding debt.  They wrote “interest only” loans that ensured the loan balance would be greater than the price of the house in three years. They levied penalties and changed terms at the last minute, at closings.

Predatory Loans

These practices gave rise to the term “predatory loan.”  Predatory lending practices are and always have been illegal.  Predatory loans bring about rapid financial crises for borrowers through penalties and increased payments, often causing families to lose their houses, or being forced into the expensive bankruptcy process.

I think I got a predatory loan… am I just out of luck?

No.  If you got a “predatory loan,” you could actually have a strong case in United States Federal Court to get

• Your mortgage changed or modified by the Court, including possible lower interest rates,
• Penalty payments refunded,
• Legal fees for the lawsuit paid by the bank that broke the law,
• Any marks made against your credit rating by the mortgage lender removed, and
• possible punitive damages payments.

Again, this is only if you fell victim to “predatory lending practices,” which requires that your lender actually broke laws that applied to you at the time you closed on your loan.

How can you tell if you got a predatory loan?

There is a questionnaire later in this post.  If you answer “Yes” to one or more of the questions, there is a possibility you got a predatory loan.

What can I do if I don’t have a predatory loan, but can’t afford my house any more?

Contact a local real estate agent immediately. Try to sell, even if it’s the last thing you want to do. Clean up your house and yard as best you can to get the highest offer possible given the current market conditions. Discuss “short sales” with your real estate agent. Keep paying all your other bills on time if you can. Bankruptcy is an expensive option out. Avoid it if you can.

What can you do about your predatory loan if you have one?

You can contact a forensic audit/accounting company that is extremely familiar with real estate law and the mortgage closing process and has contacted attorneys in your area about taking predatory loan cases on a contingency basis. 

“I have a financial crisis right now. How do you expect me to pay a fee? How do expect me to pay a lawyer?”

If you have a predatory loan and enough of the documentation (mortgage paperwork, letters, saved emails, etc) and you have a very good case, there is temporary financial relief for you built in to the process.   When a lawsuit is filed against your predatory lender, your attorney may also file a restraining order against your lender.  This freezes your mortgage for the duration of the lawsuit process.  This means you make no more payments until a settlement is reached with your lender, or you prevail in court.  If you have been able to make payments until your interest rate adjusted or payments increased, you will probably not find this fee to be excessive at all. Your attorney’s fees are paid by the lender when you prevail, that is, win, in court. Your attorney has to file the right motions!

Does the lawyer taking the case on a contingency basis mean I don’t have any legal costs to sue?

No.  Your attorney will probably require one initial retainer fee to offset the costs of all initial court filings.  All of your additional legal costs will be paid by the highly probable settlement.

“Do I get my house for free if I win?”

No.  A successful lawsuit against a predatory lender means that excessive penalties you have already been charged may be refunded, and interest rates and the terms of your mortgage are modified to be in line with standard mortgages most other people got.

How long does the whole process take?

This process could take anywhere from three months to 24 months, depending on the case load of the Court System.

Is this like other mortgage modification plans?

No.  Absolutely not. This process is for people who have been given predatory loans in violation of real estate law.  This involves filing a lawsuit in a United States Federal Court against your mortgage lender.  New, more standard terms are negotiated with your mortgage lender directly, balances adjusted, penalties refunded, etc.

How is this different from filing for bankruptcy?

In a bankruptcy filing, your credit rating suffers, you lose your assets, and you pay your bankruptcy attorney’s fees.  In this process, if you have a good case and you prevail, any negative marks against your credit rating made by your mortgage lender are cleaned up and removed, your attorney’s fees are paid by the lender, and you keep your house and other assets.

“..But I never got any mortgage paperwork!”

This is another matter altogether. If you can provide proof in the form of unanswered letters, phone calls, emails, you may have a strong case.

How can you tell if you got a predatory loan?

If one or more of the following statements is true, you may have a predatory loan:

1. You refinanced in 2005 or later.
2. Your home is worth less than you owe.
3. The Interest Rate or Total Loan Amounts were changed at the last minute, resulting in you owing/paying more on your loan(s).
4. You paid more than $5,000 in closing costs.
5. You were not encouraged to read your closing documents and were just told where to sign.
6. You signed closing documents without a loan officer or mortgage broker present to answer any questions.
7. Your closing documents were not in your native language.
8. You don’t speak English well and you were not provided a translator.
9. Your loan has excessive prepayment penalties.
10. Your loan charges a prepayment penalty if you refinance before the loan converts to a higher payment.
11. You were asked to sign blank forms.
12. You didn’t get copies of any/all of your closing documents.
13. You were given a loan you can never repay.
14. Some of your documents were falsified by your mortgage broker to show that you made more income than you really did earn.
15. All of the terms of your loan were not fully explained to you.
16. You paid $35 or more at closing than you were told you would have to pay.
17. At closing, your interest rate was .125% or more higher than you were told it would be.
18. You have a pick-a-payment loan.
19. You have a Negative Amortization loan.
20. You have, or did have an Adjustable Rate mortgage or an interest only loan.
21. When you got the loan, your debt-to-income ratio was more than 55%.
22. You were asked to pay more for your loan because the mortgage broker wanted to include unnecessary insurance or other products and financed them into your loan.
23. Your loan requires ‘Mandatory Arbitration’ if you want to take your lender to court.
24. If you were given a subprime mortgage even when you feel you could have qualified for a mainstream mortgage at a better interest rate.
25. If you were promised that your payment included taxes and insurance and does not cover them.
26. You supplied W-2s and tax forms but were still put in a “stated income” loan.
27. If you had good credit but were put into a no-doc loan or were put into what you think is a subprime mortgage.
28. You weren’t given preliminary closing documents at least 24 hours before your closing time.
29. If you were promised anything and it didn’t happen or was different from what you were told.
30. If you feel you were misled or cheated in any way.

To stop or avoid foreclosure in nearly any city in the United States of America, there are basically only a few legitimate options. This may seem obvious to some, but new for others who have not been able to take an objective look at their situation.

Here are a few options:

• Sell your house prior to the foreclosure auction. Your local real estate market will determine if this is more easily said than done. We’ve been hearing bad news about the national real estate market for a couple of years now. Selling your home could be a challenge. The best thing to do is contact a local real estate broker who specializes in pre-foreclosure or distressed sales. He will be able to help set the price to help you sell your house in your market.
• Contact your bank to negotiate a loan modification. In a loan modification your lender changes the payment terms of your mortgage to more closely match your ability to pay. There is no guarantee a bank will agree to it, but contrary to public opinion, banks don’t want to own your home. It actually costs them money to maintain it before they can resell it. Beware, though. Load modification scams are rampant, preying on desperate homeowners.
• Refinance. Rates are at historic lows. If you can show income, even reduced from when you got your mortgage, you may be able to refinance to take advantage of lower interest rates, or different terms that would enable you to keep your loan current. If your property is worth less than the balance of the mortgage, you may consider a “short refinance”, which is when a lender forgives a portion of the debt to help you qualify for a loan that you will be able to pay. Beware though, of the tax ramifications. The amount of the debt “forgiven” is considered income by the IRS. It will change your tax returns.

When you’re trying to avoid foreclosure, the key is fast action.

While fast action is critical, you should also be wary of scams. There are many legitimate real estate investors and investment groups who offer cash for your home for the purpose of making money on its eventual sale. However, there has been a significant amount of fraud with “Stop Foreclosure” scams. Remember the rule of thumb: If it sounds too good to be true, it probably is.

There is a lot of emotion involved in a financial crisis, especially one that involves possible foreclosure. Sometimes the best course of action will be to figure out how to stay in your house. Other times, getting out from under the overbearing payments and starting over is best.

Getting the advice of an attorney or real estate professional or accountant (or all three!) who is not as emotionally connected to your house as you are is one good step to take.  If you work with a real estate broker who has helped people in similar situations to yours (it is more common than you think), they will be able to refer similarly experienced attorneys.

Good luck.

Getting the right help on bankruptcy can appear to be a frightening task to some. One must avoid bankruptcy help that is confusing on precisely the way the process of bankruptcy works. Entrepreneurs should also be conscious of what the implications will be if such a call is made.

Many small to medium businesses have seen a dramatic slow down as consumers are buying less or not buying anything at all. These same worried firms are also having issues getting credit from banks and financing firms as the decelerating economy has put a clamp on lending.

These contributors are causing many home entrepreneurs to file for bankruptcy. It’s vital to remember that entrepreneurs should not avoid bankruptcy help. It can imply the difference between saving your business and your life and losing everything.

A Major Decision

As with any major life call, the choice to file bankruptcy should be one that is well researched. Ensure that you’ve got the right tools you want to make the best call for your present position. Avoid bankruptcy help that doesn’t explain to you that the first question you will need to ask is should you file for Chapter 7 Bankruptcy or Chapter 13 bankruptcy.

Never avoid bankruptcy help that includes all the available options that you may consider as there are many alternatives to filing for bankruptcy. Depending on the dimensions of your debt, options such as debt consolidation or credit support could be reasonable alternatives to filing for bankruptcy. Elude becoming broke help that offers to consolidate your debt at a foolish rate which will have you paying for the rest of your life.

It’s important to totally research all the alternatives before determining that filing for bankruptcy is, indeed, the most suitable option for you.

Look At The Situation

You may wish to avoid bankruptcy help till you have sat down and listed the following : the whole amount of all your liabilities including the interest rate you currently pay on each of your loans. Review your home budget with the plan of liberating additional money for debt repayment.Review copies of your present credit reports to discover what hurt your dues have recently caused to your finance reputation. Think about the potential flaws of filing, including the difficulty of getting reasonable credit in the future.

Bankruptcy should only be considered if: You cannot meet debt obligations based on your current income. Attempts to organize a payment schedule with your banks have failed. Your proportion of debt to yearly earnings is 40% or more. Prior tries to reduce debt have failed, especially with the aid of a credit advisor or debt reduction plan.

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Bankruptcy isn’t a cosy out. It is unimaginable for something to be that easy for the realism that the government is essentially giving the individual permission to not pay their debts. And one knows that is something that doesn’t make one pay in any way.

Important Bankruptcy Information

When one has to file bankruptcy, one has to go into a credit support plan. The individual has to complete that credit support program ahead one ever file bankruptcy. The rationale being because one must be regarded as not ready to pay their bills. The credit advocate has to say that there is no hope for the individual to pay the debt, so bankruptcy is the only choice. When one files bankruptcy, it will stay on the credit written report for 10 years. This implies that one might have difficulty getting credit. Nearly all the folks that have filed bankruptcy are told that they won’t receive new credit for just about two years. Some are not even that lucky. Having a bankruptcy on the credit report could keep the individual from acquiring a job. The majority of the bosses are now considering credit reports to find out how an individual deals with their finances. They like to see this especially if you’re going to be dealing cash.

If you do obtain credit after filing bankruptcy, you’re looking at high fees and high interest rates. This can cost thousands more than if you had good credit. Many people try to hang fire till after their bankruptcy is removed from their credit history. After the bankruptcy is moved out from the credit history, it may still be rather tough to build new credit. The explanation being as the record is passed over clean and one has to start over again.

The good thing is to try speaking to a credit advising company and see what they can do for the individual. Credit analysis recommends can usually work out a deal with the people that involve decreasing the payment and even obstructing interest assembly. This admits one to pay the guilt off quicker. If the credit isn’t bad yet, then one can look into responsibility consolidation. This admits one to combine all the unguaranteed liabilities. If you are uncertain what unbarred debts are, they’re the liabilities that are not warranted by some variety of confirmative. Debt integration admits one to mix everything into one debt so that one has single payment that costs less than what the payments did when they were fall apart.

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There are a few critical details to study when it comes to bankruptcy law and that whole matter, particularly if you are someone that is considering going thru and filing for bankruptcy yourself. The more that you will find out about Chapter 13 bankruptcy information the better off you are going to be in the future.

You must never get yourself into something you are not totally sure about, particularly when it comes to something as major as filing for bankruptcy. Here is some of the most critical Chapter thirteen bankruptcy info that you must be learning more about.

The Details

When it comes to Chapter thirteen bankruptcy info, one of the most significant things for you to understand is that it’s also known as a wage earner’s plan. This Chapter thirteen bankruptcy information means you are able to get helped if you are an individual with a steady revenues and you are looking to develop a scheme to replay some or all your dues.

See there are various sorts of bankruptcy that you can file for, which is the reason why it is so crucial to make certain that you take the time to learn up on stuff like Chapter thirteen bankruptcy info, so you can ensure that you’re going thru and filing for the decent thing. For one with this type of bankruptcy, as opposed to Chapter 7 bankruptcy for instance, you have the opportunity to save your homes from foreclosure.

There are certain eligibility requirements that you are going to have to meet if you want to file for Chapter 13 bankruptcy. There are certain suitability requirements that you’re going to need to meet if you need to file for Chapter thirteen bankruptcy. Now there are bankruptcy lawyers, and these are professional lawyers who specialize in the area of bankruptcy and who are going to be able to really help you out here.

Now there are bankruptcy attorneys, and these are pro attorneys who focus on the area of bankruptcy and who are going to be in a position to actually help you out here.

The last thing that you are going to must do here is make a howler, and so with an attorney by your side you know that you are going to making the entire process go as smoothly as possible.

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So of course if you are going through and filing for bankruptcy or even if you are just considering it you are going to want to make sure that you have as much information as possible, such as on bankruptcy discharge information. Now there are plenty of things that you are going to need to learn, but you must never let yourself get overwhelmed.

Manifestly if you are considering filing for bankruptcy then you’re in finance difficulty and know that there’s nearly no other way out for you. Now the very last thing that you’re going to be ready to is spend any cash on anything additional naturally, but you can find free bankruptcy information.

Go Online

If you’d like to find free bankruptcy information, then the neatest thing that you can do by far is get on the web. The web is certainly going to be the best resource that you have available to use here, and so you’re going to wish to exploit it. You may even need to make notes as you go along, so that as you are reading through this free bankruptcy information you are going to be in a position to make points of things that you find essentially critical.

Now if you want to find free bankruptcy information on the internet, just make sure that you go to a search engine, type in what it is that you’re attempting to find, whether you need some general data or there are some express questions that you may have.

There are other tips as well that are going to be helpful for you during this time, besides getting online to find out free bankruptcy information. For one thing, getting yourself a bankruptcy lawyer may be the smartest thing that you can do for yourself at this time. This is a professional who knows what they are doing because they deal specifically with bankruptcy, and they are going to be there to make sure that you do not make any mistakes.

You can find these lawyers almost anywhere, but your best chance is going to be to go through the bankruptcy court in your area and you will be able to talk to someone there who is going to be able to give you contacts to some bankruptcy lawyers. Ensure that you find one which has a big quantity of expertise and who’s going to help.

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