When it comes to abusive loan practices, the mortgage industry isn’t light on hucksters and predatory lenders willing to step up and offer a full plate of borrower abuse. That’s not to say that every lender is a bad guy. But a savvy attorney needs to know how to spot a predator and how to defeat him.
Here are 8 abusive loan practices and what you can do to combat them.
- Excessive Fees - This is just downright illegal. If your client complains of excessive loan fees, you need to a document review to see just where those fees may have originated.
- Abusive Prepayment Penalties - Another illegal move on some types of loans are prepayment penalties. A big red flag.
- Kickbacks to Brokers (Yield Spread Premiums) - The law is very clear about this one. No kickbacks!
- Loan Flipping - Some states have some pretty hefty fines for loan flipping.
- Unnecessary Products - While this is a bit of a gray area, there are some definite red flags if a mortgage company offers products and services that aren’t necessary or wanted.
- Mandatory Arbitration - A borrower has a right to a fair hearing. If a mortgage company mandates arbitration through a company that is friendly to their interests, that’s abusive.
- Steering & Targeting - The practice of steering clients to a more expensive loan when they can qualify for a more reasonable one. Very abusive.
- Breach of Contract - This is one an obvious legal red flag. If it’s in writing and they don’t do it then they’ve violated the law.
There are obvious lender violations and then there are some that are more subtle. Still, a violation is a violation. If you want to fight and win against predatory lending, no matter what the violation, then you need to start with a forensic loan audit. Uncover the evidence first.
Is your mortgage unbearable? Do you find making the payments harder and harder every day? If so, there may be relief.
It’s a known FACT that 83% of all mortgages have lender violations. And many of those violations could result in hefty fines for the lender. The lender would rather renegotiate your loan payments than to have to pay you back your back interest, which is the penalty for many violations, AND pay a fine on top of that. It just makes more sense for the lender to renegotiate your loan and help you get your payments to an affordable level.
That said, the only way you can tell whether or not you have lender violations in your mortgage contract is to get a forensic loan audit. A forensic loan audit consists of a professional review of your mortgage documents to see if your lender followed all the applicable local, state, and federal laws concerning your type of loan. Even an innocent error by your mortgage company can be a costly mistake for them. That’s why uncovering even a simple error could be your best ammunition for renegotiating your mortgage contract.
Too many homeowners make the mistake of thinking they couldn’t qualify for a loan settlement if they are not behind on their payments. You don’t have to be behind on your mortgage to get a settlement. If you are in upside down and owe more than your property is worth but have never missed a payment, you could still qualify.
Here’s a simple fact to remember: 83% of all mortgage loans have violations in them.
What that means is you could still qualify for a loan settlement even if you’ve never missed a payment. Even if you have bad credit. And it doesn’t matter whether you have an adjustable rate or a fixed rate loan. What matters is whether your mortgage lender has followed all the applicable laws.
To find out if you can qualify for a loan settlement or if your mortgage has lender violations, contact a qualified loan auditor today.
Welcome to the Forensic Loan Audit Blog. This blog is dedicated to providing useful and expert tips on forensic loan audits, where to get them, how to find a loan auditor that will help you get the loan settlement you deserve, which firms you can rely on and which ones to steer clear of, how to identify a loan auditing scam, and many more useful expert tips.
A forensic loan audit is a very important part of the loan settlement and loan modification process. Until you fully understand your rights as a loan or credit consumer, particularly where your mortgage loan rights are concerned, you cannot fully appreciate the loan auditing process.
Forensic loan audits are necessary for two reasons:
- To ensure that mortgage companies and other lenders are not violating their contracts and, therefore, your rights
- And, if so, to ensure that consumers get the retribution and adjustments to their mortgage contracts that will ensure a fair deal in the future
It’s not all about retribution. It’s also about fairness and accuracy. Many loans have violations in them a forensic loan audit can often uncover the problem areas.
If you need more information about forensic loan audits, be sure to let us know - and be sure to follow this blog regularly.