Additional Information on Predatory Lending

Bank Fraud

Consumer Protection Laws

The Truth In Lending Act

Mortgage Audit

Mortgage Broker Fraud

Debtors Rights

Mortgage Loan Fraud

Predatory Lending Laws

Predatory Loans

Predatory Mortgage Lending

Regulation Z Truth In Lending

Right Of Rescission

Yield Spread Premium

Mortgage Servicing Fraud

Consumer Credit Law Library

State Laws and Regulations

Federal Regulations (lending)

Center for Responsible Lending

Bank Fraud

Along with the exceptionally low interest rates of recent years has come an unfortunate companion: predatory lenders. The commercial noise of all the competing lenders in the home mortgage loan market often obscures the very real problem of predatory lending. If you've recently taken on a mortgage or are thinking of refinancing your home, it's critical that you are aware of the inherent dangers of borrowing money.

Though predatory lending practices are most prevalent among those with lower incomes, the tactics are extend to all consumers. It's important to educate yourself in order to avoid being taken in inadvertently. Anyone using the right terminology and offering great rates can appear to be a legitimate banking-related business, but beware the many signs of those who are simply looking to defraud you and your family.

Among some of the most common warning signs of bank fraud are the following: excessive fees, severe prepayment penalties, "Yield Spread Premiums," which are kickbacks to brokers, and loan flipping. This is the common practice of repeated refinancings on one home. These transactions garner the lender repeated profits from closing fees and more, but are of no benefit whatsoever to the borrower.

The The Loan Doctor's Fraud Specialists Center is here to educate consumers and to help victims recover their losses. If you are a victim of mortgage fraud or predatory lending, it's possible in many cases to apply 100 percent of your payments to the principal with our help.

Consumer Protection Laws

Many honest, hard-working Americans assume that any banking or financing firm that would offer them a lending opportunity must be legitimate. Unfortunately, this is not always the case. Particularly during the recent frenzy of mortgages, loans, and refinancings, so-called predatory lenders are increasing in number. And consumer protection laws tend to come into play only after one has become a victim.

Even the most vigilant of consumers can be duped by cleverly hidden fees and charges. If you don't fall prey to a poor refinancing transaction, you may still experience unnecessary charges or high interest rates on your current mortgage, for example. Predatory lending extends to every aspect of financial services these days, so it's important to remain alert to the warning signs.

Does your loan have a prepayment penalty, for example? Perhaps your lender paid money to your mortgage broker. Or maybe you signed a document at closing stating that you were not cancelling? These are among the many subtle, yet costly, methods that predatory lenders use to take advantage of their clients. In a highly complex mortgage transaction, bad lenders find it incredibly easy to fleece eager homebuyers of their savings.

If you suspect that you've been a victim of predatory lending or mortgage fraud, contact the The Loan Doctor's Fraud Specialists today. We specialize in auditing mortgage documents for fraud violations and in consulting consumers on predatory lending practices. There are consumer protection laws that come in to play if you need them.

The Truth In Lending Act

The Truth in Lending Act became a part of the broader Consumer Protection Act in 1968. The crux of the law involves protecting consumers from dishonest credit transactions by requiring lenders to fully disclose all costs and terms used in lending documents. The law was enacted more than 30 years ago, however, when there were very few choices for home loans.

Today, there are dozens of options for home loans, which makes the market confusing. This cloudy picture is just the way certain so-called predatory lenders like to keep their business. Preying on lower-income consumers and those with poor credit, in particular, these lenders will use every means at their disposal to gouge homeowners of their hard-earned savings, and in some cases, of the very home they were trying to protect.

The best way to protect your home investment is to arm yourself with knowledge before anyone can take advantage of you. Certain red flags can alert you to predatory lenders and these include prepayment penalties, excessive fees, yield spread premiums, mandatory arbitration, and any unnecessary products. The Truth in Lending Act requires lenders to be clear about each of these items.

Mortgage Audit

Each year, an astounding $25 billion of American savings is taken in the form of predatory mortgages, payday loans, overdraft loans, tax refund loans, and excessive credit card debt. Predatory mortgages alone make up nearly $10 billion in fraudulent fees, charges, and kickbacks. Bad lenders count on consumers being unaware of their rights when it comes to the complicated process of obtaining a home loan.

If you suspect any questionable fees or terms within your mortgage agreement, you may want to consider having a mortgage audit conducted. The complex mortgage landscape in recent years has unfortunately invited increased abuses among shady lending organizations. Even if you think your mortgage fees were legitimate, it doesn't hurt to have them examined by an expert for fraudulent charges and illegal kickbacks.

These charges can take the form of points, penalties, and the like. Perhaps you've found fees on your mortgage statement for "property preservation" or other "advances." Or perhaps you've noticed that your principal never seems to go down. Some consumers find that their monthly payments are not posted in a timely manner. The The Loan Doctor's Fraud Specialists Center is here to help consumers separate the legal from the illegal, and in certain cases, to help recover costs.

Mortgage Broker Fraud

Years ago, when your family took out a mortgage with a lending company, you could be pretty certain that it was a straightforward 30-year mortgage with no surprises. The mortgage industry today, however, is a different story. Many more lenders have gotten into the game, including some that are less than legitimate. Though there are consumer protection laws in place such as the Truth in Lending Act, there are still myriad ways for bad mortgage brokers to defraud you.

Most mortgage broker fraud happens in the so-called "subprime" market, which encompasses consumers with weak or bad credit. Even more unfairly, it also commonly targets those with the least money to lose. This does not mean, however, that middle- and higher-income consumers are immune to mortgage fraud. Rather, fraudulent charges are often buried or disguised as necessary parts of a mortgage agreement.

At the The Loan Doctor's Fraud Center, we firmly believe that if you know your rights, you don't know your options. We specialize in auditing mortgage documents and consulting with consumers on predatory lending practices. Once you're aware of what to look out for, the chances of being a victim of fraud are greatly reduced.

Debtors Rights

You may have found out too late that you've been the victim of predatory lending. If you were offered a mortgage that was too good to be true, particularly in light of weak or bad credit, then beware. Unscrupulous lenders love to take advantage of those consumers whom they believe are not in a position to defend themselves. As a so-called debtor, however, you do have certain rights.

Many of these rights fall under the Truth in Lending Act that was enacted in 1968. Back then, the mortgage industry was a lot simpler. Its increasing complexity has allowed bad lenders to proliferate. There are many rules that lenders must still abide by, however, so it's important to know what they are before you find yourself facing bankruptcy or foreclosure.

Lenders are required to disclose all fees that they charge you. They must also clarify all the terms used in your mortgage agreement. This is a common way for predatory lenders to charge you illegal fees. For instance, look out for "prepayment penalties," insurance balances for "property preservation," or the popular kickback to brokers called the "yield spread premium." Though not all fees are illegal, lenders do have to abide by stringent disclosure laws.

Mortgage Loan Fraud

Until the last decade or so, prospective homebuyers could be relatively certain that they knew what they were getting into with their mortgage loan. They could also count on the original lender continuing to be their lender. Not so anymore. Often, a loan is sold to a new servicer immediately after you close. And that may be just the first of many lenders to service your loan.

There is so much for the average prospective loan customer to be aware of that "predatory lending" has proliferated. These firms know that the average American can't possibly know all of his or her rights and they exploit that advantage. Under the Truth in Lending Act and similar federal legislation, you are entitled, as a consumer, to certain legal rights.

Particularly when your mortgage is sold, as happens frequently, your original lender must notify you at least 15 days before the transfer. You also have a 60-day grace period during which you cannot be penalized for mistakenly sending a payment to the old lender. The new loan servicer also cannot report the receipt of late payments from you to a credit bureau.

For a full consultation on the dangers of predatory lenders and for help auditing your mortgage documents for fraud, count on The Loan Doctor's Fraud Center. Our financial experts specialize in mortgage loan fraud prevention and recovery. Don't let your lack of expertise in the business hinder the biggest transaction of your life.

Predatory Lending Laws

Each year, Americans are robbed of over $9 billion dollars of their hard-earned money by predatory lenders. The laws that govern predatory lending are, unfortunately, easy to skirt, especially when mortgage borrowers don't know their rights. Predatory lenders seek out those people in vulnerable positions in particular, so if you're offered a loan that sounds too good to be true, it probably is.

Homeowners who have fallen behind on property taxes are often targets of predatory lenders who hope to push them into bankruptcy and foreclosure. Those homeowners who face medical bills or costly home repairs also often find themselves grasping for loans that carry high interest rates, inflated fees and terrible repayment terms. These loans, for the most part, are not technically illegal, so predatory lenders are essentially allowed to proliferate.

There are certain consumer protection laws in place, but unfortunately, they can't stop these loan fraud experts in their tracks. Instead, the Truth in Lending Act, for instance, is most helpful in picking up the pieces in a court case, after the damage has been done. The The Loan Doctor's Fraud Center is on your side, offering education on your rights, as well as legal help, if necessary.

Predatory Loans

With the mortgage loan and refinancing industries working full tilt to get your business these days, there are a few facts to keep in mind. So-called predatory loans and lending practices are difficult to regulate, so they exist everywhere. From outrageously high fees to a mysterious line item in your closing costs that never gets explained to you, the tactics of predatory mortgage loan companies take advantage of the fact that most borrowers don't know what to look out for.

At the The Loan Doctor's Fraud Center, we specialize in educating consumers on the potential minefield that is the loan business. We also work with consumers who have been defrauded, to help them recover their losses using the rights detailed in the Truth in Lending Act. If you're taken in by a predatory lender, we're here to help, but it's best to avoid the situation altogether.

Keep an eye out for excessive fees; unnecessary refinancing, known as loan flipping; unfair prepayment penalties; kickbacks to brokers, known as yield spread premiums; mandatory arbitration; and any unnecessary products that a lender tries to sell you. The financial experts at the The Loan Doctor's Fraud Specialists Center can do a careful audit of your mortgage loan documents. This will often yield questionable line items that can sometimes be recovered through legal channels.

Predatory Mortgage Lending

If you fear that you may have been the victim of predatory mortgage lending, you're not alone. Each year, Americans are defrauded to the tune of billions of dollars through predatory lending practices. It's easy enough to be taken in, and some groups, especially lower-income families and minorities, are unfairly targeted more often than others.

The The Loan Doctor's Fraud Center can help you get educated on the tactics of predatory mortgage lending. Our experts can also audit your mortgage documents for fraudulent items. In addition, there are several questions you can ask yourself first to help determine whether you're a victim of unfair practices. For instance, were you charged high closing costs on your mortgage?

Many people have problems with untimely posting of their mortgage payments--do yours get posted on time? Have you noticed sudden increases in payments? Or have you noticed over time that your principal doesn't seem to go down? So-called yield spread premiums should be a red flag, as should any last-minute changes to your loan that were made to your detriment. These are all subtle and not-so-subtle practices to look out for among unscrupulous loan companies.

The financial specialists at the The Loan Doctor's Fraud Center offer full document auditing and consulting services.

Regulation Z Truth In Lending

If you've started looking into the facts about predatory lending, you may know about the Truth in Lending Act, or TILA. Enacted by Congress in 1968, the Truth in Lending Act was originally part of the Consumer Protection Act and was meant to protect borrowers from falling prey to dishonest lenders. Regulation Z is an important part of the act.

Regulation Z defines to the businesses that extend credit to consumers exactly what they may or may not do when they extend this credit. It applies to both mortgage lenders and credit card companies. One part of it protects consumers by giving them the right to cancel certain credit card transactions that are in connection with a lien on the consumer's so-called principal dwelling.

Regulation Z also attempts to protect the millions of Americans who use credit cards. While Regulation Z does not regulate charges for consumer credit, it does regulate certain credit card practices and it ensures a fair and timely resolution of credit billing disputes. With all that said, however, many credit card companies--even those with names you know and trust--will still not tell you up front what fees you can potentially be charged.

Particularly when it comes to credit transactions, the fine print matters. Learn how to protect yourself before you need to pursue legal action with Regulation Z. The The Loan Doctor's Fraud Center can help.

Right of Rescission/Right to Cancel
 

The Right to Cancel or the Right of Rescission is a right given to borrowers within Regulation Z of the Truth in Lending Act. Sometimes known as a "cooling off period," the right of rescission gives borrowers of certain types of loans three business days (in some cases three years) to cancel the loan and to receive a full refund on any money they've already paid up front. It's an extremely important right, and one that every borrower should be aware of in advance of signing loan papers.

At the The Loan Doctor's Fraud Center, we strive to make sure consumers are informed of their rights before they get into trouble. In this current refinancing frenzy, for instance, it's easy to get overexcited about reducing your mortgage payments and fall prey to a bad lender. Regulation Z and the Right of Rescission lets you take a couple of days to make sure your decision is the right one.

The Right of Rescission also applies to personal loans you may agree to that use your home as collateral. The law gives you that crucial extra time to reconsider the loan or to even consider other options for financing. It's equally important to know that the Right of Rescission does not apply in the case of loans for purchasing or building your primary residence, or when you're refinancing with the lender who currently holds the mortgage on your home.

The following is a list of fees and finance charges and refunds that the broker must comply with. You will also be able to keep all funds transferred into your account and if the broker pays off your old mortgage you get free clear title.

Rescission Fees Credit

1. Finance Charges including all Finance Charges already accrued;

2. All closing costs;

3. Security interest charges; Even if it is part of the amount financed as opposed to a finance charge;

4. All other charges incurred for the actual credit transaction;

• Application fees

• Membership fees

• Commitment fees

• Appraisal fees

• Survey fees

• Broker fees

• Credit report fees

• Filing fees

• Title search fees

• Attorney fees

5.  Any money given as earnest money, down payment or otherwise;

6.  Credit any payment made on the entire loan;

7.  All cost incurred outside of the credit transaction must be refunded or else they become an actual damage.

Failure to comply is automatic violation; 15 USC § 1640 with $200.00 to $2000.00 penalty per violation at courts discretion depending on severity of the liability.

Yield Spread Premium

There's a lot of talk in the mortgage business about the so-called "yield spread premium." While those in the loan business contend that it's a necessary fee for doing business in the mortgage loan world, others view it as simply a kickback. A yield spread premium is a lump sum paid by a lender to the mortgage broker for receiving a loan with a higher interest rate.

As a consumer, you may be completely unaware of the yield spread premium until it appears as a line item on your mortgage documents. While the fee is used to help offset the borrower's closing costs, an unscrupulous broker will see the YSP as a reason to steer clients toward a certain lender. This steering concept is illegal.

As with many rules and regulations in the mortgage loan world, the YSP is often misused to the detriment of the borrower. In this case, it is simply a kickback from the lender to the mortgage broker and it's best to steer clear yourself of any loan that gives your broker a YSP. To learn more about staying ahead of predatory lenders, contact the The Loan Doctor's Fraud Center.