OUR SERVICES
Exposing Fraud and
Damages in Home Mortgage Loans
It is true that most consumers are unfamiliar
with the procedures, requirements and complexities that entail a home
mortgage loan application, such as: calculation of interest; right to
recession; appraisal fee, loan origination fee, was your yield spread
premium disclosed (“YSP”); illegal kickbacks, federal disclosure
requirements, discount points, switching rates between initial disclosure
and closing, mortgage fraud by lenders and brokers; prepayment penalties;
total interest (%); adjustable rate mortgage fraud (“ARM”); bank fraud;
flipping, the list is endless. To assist you, below are some examples of
predatory lending practices.
Our primary goal at LAS is to provide you with
a thorough evaluation, assessment and audit of your loan. Only after a
careful examination and assessment are we able to reveal any potential
predatory lending violations and abuses. Once this has been done, we will
assist you in finding competent legal counsel to take matters further.
We aim to give our clients a chance to fight back for predatory lending
abuse.
LAS’s goal and prime objective is to expose
potential fraud and damages. As part of our services, we provide
experienced mortgage audit professionals whose responsibility it is to
thoroughly examine all documentation that will reveal fraud, deceit, unfair
practices, misrepresentation, violations of the Truth in Lending Act,
violations Regulation Z, Real Estate Settlement Procedure Act violations,
violations of Regulation X, including State law requirements within the
lending industry.
All violations that are revealed will be
forwarded onto your attorney for there review. Obtaining a thorough
examination, assessment and evaluation of all your loan documents may even
stop foreclosure proceedings on your home, restore your credit rating,
provide you with damages and punitive damages for substantial violations of
Federal and State laws. This is all part of our services undertaken by
our loan auditing experts, which is to find and expose fraud and damages.
All contact information is subject to confidentiality and privilege laws of
the United States.
What our Audit covers:
1. Truth-In-Lending
Act (TILA)
Violations — Inaccurate reporting of APR and finance
charge calculations
on borrower disclosures. Calculation errors may occur as a result of
failing to include one or more prepaid finance charges in the
calculations, incorrect disclosed funding dates, or last-minute
changes made to the loan by the settlement agent at the closing table.
If understated, the lender is in violation of the federal
Truth-In-Lending Act as well as many state laws prohibiting such
actions. Lender required to
reimburse borrower for the difference, and may be subject to statutory
damages, administrative sanctions, loan buy-backs, and lawsuits. In
addition, the rescission period may reopen, creating additional risk
for the lender.
2. Anti-Predatory Lending Violations — Consumer
protection laws, regulations and guidelines exist at the
federal, state and local levels, and function by placing strict but
varying limits on the rates and fees that can be charged to a
borrower. Violations typically occur because of the vast
misunderstanding of how they work. Examples of violations include
failing to include fees such as yield
spread premiums in
the calculations or using an incorrect loan amount value to perform
the calculation. Penalties for
violations are as varied as the laws that govern. Typical costs
include borrower reimbursements, statutory and punitive
damages, attorneys’ fees, administrative fines and penalties,
loan buy-backs and reformation, and class-action lawsuits.
3. State Law Violations (Non-Predatory) — Failing to
maintain adequate safeguards in loan
origination systems and
well as document software systems results in loans containing illegal
terms or provisions. Examples include illegal prepayment
penalty clauses, rates that are usurious, or fees that are not
allowed to be charged. Typical
penalties include actual damages and costs, attorney’s fees,
administrative fines and penalties, loan buy-backs, and class-action
lawsuits.
4. Reverse Mortgage Violations — With an expected 55
million Americans turning 62 in the coming years, the “next big thing”
will almost certainly be reverse
mortgages. Common violations include failing to adequately
disclose the APR, which is different than that of forward mortgages,
and providing incomplete or improper disclosures. Because this is such
a new segment in the industry, penalties are less clear than with
forward mortgages. As these types of mortgages affect senior citizens,
class-action lawsuits are a real and serious threat.
5. Real Estate
Settlement Procedures Act (RESPA) Violations
RESPA prohibitions place limits on a lender’s or broker’s ability to
charge or pay fees that are hidden from the borrower. Common
violations include accepting kickbacks or referral fees, upcharging
for services provided by third parties, and charging for services not
actually performed. Penalties include actual damages, administrative
fines and class-action lawsuits.
Others: Lending without providing borrowers a reasonable, tangible net
benefit, state-specific disclosure errors, servicing violations, Fair
Lending violations
SOME EXAMPLES OF EXPOSING PREDATORY LENDING AND FRAUD
§
Example of Interest Rate Increase:
Loan amount $200,000;
Quoted 6%; 7% at Closing
$200,000 @
7% = $1,330.60
$200,000 @ 6% = $1,199.10
Difference
of $ 131.50 per month
x 12 months
Increase
of $ 1,578.00 per year
Times
30 years x 30
$ 47,340.00 The actual cost over the term
of the loan.
§
Example of Yield Spread Premium (YSP)
Interest Rate Increase:
Loan amount $200,000; 3
POINTS YIELD SPREAD
In non conforming loans
each point of Yield Spread Premium will increase your interest rate by .60%.
3 points; .60% x 3 = 1.80% increase of the interest rate. If your interest
rate was 6%, 3 points of Yield Spread would make the new rate 7.80%.
$200,000 @
7.80% = $1,439.74
$200,000 @ 6% = $1,199.10
Difference
of $ 240.64 per month
x 12 months
Increase
of $ 2,887.68 per year
Times
30 years x 30
$ 86,630.40 Actual Cost over the Term
of the Loan.
§
Example of Adjustable Rate Loan (ARL)
Interest Rate Increases:
This example is for people that did not have it disclosed to them that they
were being put into an adjustable rate loan
Loan amount $200,000; interest rate adjustments
from 8.750% to 14.750%. In a 2 year Adjustable Rate Loan your payments are
fixed for the first 24 months. At the end of 24 months your first rate
adjustment can be 3% increase; 8.750% to 11.750%. Every 6 months after that
your interest rate can adjust up by 1% every 6 months until you are at the
fully adjusted (indexed) interest rate of 14.750%.
$ 10,813.44
Actual Extra Cost to you over the first 42 months of the Loan.
$291,144.90
Actual Extra Cost to you over the balance of 318 months of the Loan.
$301,958.34 Actual Extra Cost to you over the Term of the Loan.
The above are just some examples that expose
predatory lending and fraud on part of the broker, appraiser (if
appropriate), title company (if appropriate) and lending institution. Our
auditing professionals will conduct a complete and thorough audit of all
your loan documents with the specific purpose of looking for potential or
actual fraud and/or damages.
As stated in the first paragraph of this
section, LAS conducts audits on every aspect of your loan application right
through to closing. LAS also consults a variety of Federal and State law
including but not limited to, Truth-in-Lending Act (“TILA”) disclosure laws,
Regulation Z, Real Estate Settlement Procedure Act (“RESPA”), Regulation X,
High Home Loan Mortgage Act (“HOEPA”) and so on. Call LAS today and fight
back for being a victim of predatory lending.
