With all of the finger-pointing and outcries about corrupt lenders and greedy mortgage brokers and real estate agents, every homeowner facing foreclosure may feel victimized. And certainly, there was a lot of deception and outright fraud in the mortgage markets during the boom years. But there are a few important signs to watch out for that may indicate the presence of a predatory mortgage company.
One of the clearest signs of predatory lending may be when homeowners or buyers are asked to sign documents that are completely blank or told to leave off the date. This gives criminals the opportunity to backdate, forward-date, or fill in incorrect information on a mortgage application or disclosure forms, keeping important notices from the borrowers. When the time comes to close the loan, the buyers may receive a completely different loan than they originally were sold, but which curiously has what appears to be their signatures on all the required documents.
Closely related is the issue of being asked to sign documents that have blatantly misleading or false information on them. Inflating a family’s monthly income to qualify for a higher mortgage payment is nothing more than a set-up for failure down the road. Of course, some borrowers did this voluntarily and lied on their loan applications without the knowledge of their broker, but being asked by a loan originator to sign off on incorrect figures will lead to unintended consequences and possible foreclosure or prosecution for mortgage fraud.
Loan originators were also guilty during the bubble of putting homeowners in inappropriate loans with high interest rates or deadly interest rate adjustments. They persuaded the borrowers to go along with the loan in the hopes of refinancing in a year or two when their credit had improved. As is now known, however, most people did not qualify for the mortgages in the first place and were unable to qualify for a refinance once interest rates were raised and credit started becoming scarce. This helped lead directly to the foreclosure crisis now facing the economy, as subprime borrowers never became prime; they just became sub-subprime.
Also, it is vitally important that homeowners, at the time of closing, carefully read the sales agreement and loan documents, especially the sales contract and Truth in Lending disclosures. If there are any discrepancies, or the borrowers are being asked to sign for a loan that is different than the one they were promised, predatory lending may be being committed. In fact, borrowers should have copies of the closing documents at least 24 hours before the closing, and have reviewed them thoroughly and be ready to have any questions answered.
Realtors and mortgage brokers who relied on corrupt appraisers were also complicit in predatory mortgage schemes designed to boost their own profits at the expense of borrowers’ abilities to pay their loans. Although homeowners want some appreciation of their properties, if they were originally sold a house at the top of an artificial market, an inflated appraisal may have been used. Home values should reflect the current market conditions — not be inflated to the very highest amount that can be borrowed, putting the owners into a loan on a house that is not worth even close to what they pay for it.
Unfortunately, the amount of greed in the real estate markets facilitated by the Federal Reserve and the banks have led directly to a foreclosure crisis of epic proportions. So many first time buyers and uneducated owners were taken advantage of by mortgage lender misconduct and predatory loans that it is difficult to separate the unqualified borrowers who got in over their heads from the truly criminal mortgage companies that fraudulently induced this toxic debt. But if homeowners suspect they are a victim of mortgage fraud in any way, they should contact the appropriate regulatory agencies and make sure to fight their foreclosure in court for as long as it takes.
The ForeclosureFish website has been created to help homeowners research ways they can stop mortgage foreclosure and defend against their bank’s attempts to sell the house out from under them. The site describes various methods to use, including foreclosure refinancing and mortgage modifications, along with more information about predatory lending and other mortgage lender misconduct. Visit ForeclosureFish to read more about various aspects of the foreclosure process, as well as how to recover from a financial hardship: http://www.foreclosurefish.com/
source: offshoreblog.net
link to the original post:
http://offshoreblog.net/predatory-lending-are-you-a-victim/
Fort Lauderdale Blog and Real Estate News
Rory Vanucchi
RoryVanucchi@gmail.com
http://waterfrontlife.blogspot.com
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