Help is available to borrowers who have claims against predatory lenders. Lenders across the country are violating the Truth in Lending Act and other State laws regulating mortgage lenders and mortgage brokers.

If you are a victim of predatory lending or mortgage lender of fraud, you may be able to cancel the mortgage and apply 100% of their payments to the principal. It may also be able to recover money damages.

If the answer to any of the following questions is “yes”, please leave your mortgage closing documents and audit of its loan documents for violations.

1. Have you refinanced your loan several times? It was the last refinance in the last 3 years?

(A common practice is predatory “flipping” which involves “repeatedly refinancing a mortgage loan without benefit to the borrower, in order to benefit from high rates of home, closing costs, points, prepayment penalties and other charges, steadily eroding the borrower of equity in your home. “)

2. Did you increase rather than reduce its refinancing rate to?

3. Are you paying an interest rate in excess of 9.5%?

4. The loan was obtained to pay for home improvement work that was not done properly, or even at all?

5. Have you had problems with the mortgage company in connection with the premature publication of the monthly payments? Sudden increases in payments? Adding the amounts to your balance of insurance, property preservation, “or other” progress “? Does your principal balance never seem to go down?

6. He was charged high closing costs (points and fees) in the mortgage?

7. Are the terms of the mortgage change to its detriment in the last minutes before closing?

8. Does the lender of money to pay her mortgage broker (look in your HUD-1 settlement statement for a “premium” or POC (paid closing) “YSP” or “yield spread premium”)?

9. If you have an adjustable rate mortgage, any adjustment that is done incorrectly? Can you say whether the adjustments are correct or not?

10. Does your loan have a prepayment penalty?

11. Do you think they were treated unfairly by your mortgage company? He has corresponded with the mortgage company gone unanswered? (Mortgage companies have a legal obligation to respond to complaints and requests for explanations of accounts. Often, they do not. Each failure may be entitled to $ 2000. If your claim against the mortgage company may exceed the number of monthly payments allegedly lost, the mortgage company may not be able to demonstrate that it is in default.)

12. Are all collection of letters sent to you by debt collectors to comply with the Fair debt collection Practices Act? (Up to $ 1,000 more if not.)

13. Did you (or anyone with an interest in the property and lives in the house) receive a “notice of right to cancel,” which was not completely filled?

14. Have you received your copy of the loan documents at the closing (instead of being sent to you later or that the closing agent to send you signed copies at all)?

15. Would you sign a document at the closing stating that you do not cancel?

16. The closure will occur by mail, or at home, or in another city?

There is a common scenario (between judges, borrowers, and the public) that mortgage companies do not wish to exclude and purchase real estate. This assumption is no longer well founded.

There is an increasing number of “dumps” that buy bad debts, including mortgages, for a fraction of the nominal value and the attempt to enforce them. These entities benefit by exclusion.

“Mortgages sources of confidence that some unscrupulous lenders are about to allow certain borrowers to fall into a deep financial hole from which they can not escape. Why is this? Because it pushes these consumers into foreclosure, where the lender grabs the house and sells it at a profit. ” Robert I. Heady, the people’s money, “exclusion, you should avoid it,” South Florida Sun-Sentinel, Feb. 25, 2002. In addition, if the loan is secured (by the private mortgage insurance or government), a mortgage company can be more profitable to shut down and make a claim on the collateral.

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Posted by pooch | No Comments »

The answer is quite straightforward, but maybe confusing to those who are not in the subprime finance business. In essence it boils down to a simple case of security and potential loss. If someone defaults on a personal loan, there is no real potential of recovery of any of the funds in a swift period of time.

For instance, customer A defaults on a personal loan, apart from taking them to court and trying to recover income from them, there is no alternative and if the customer has a genuine reason for default, it’s unlikely that you would obtain a judgement for anything meaningful in terms of monthly instalments. Therefore your loss is total – advance, minus payments made and the derisory judgement the court makes in a repayment schedule; assuming that the customer actually keeps to it. In this scenario, your return will drip feed in over many years and without doubt you will have to chase the customer for the payments as well. All in all, not a good position to be in if you’re a lender, this is why loans with no security are few and far between in the subprime world.

Let’s now take the subprime car loan. First of all, the lender knows that there is an asset they can repossess and sell in the event of default, so immediately were ahead of a personal loan in terms of loss. Secondly, we know that the vehicle is more than likely a critical requirement for the customer, few people want to get public transport and nowadays in general we all prefer to travel by car. This means that the customer has a reason to pay for the loan as well, so were looking good now.

Not only do we have some immediate return in the event of default, we also know there is a need for the customer to pay for the loan, rather than the basic obligation of a finance agreement. Now we now need to analyse what the loss situation is going to be. The loss is in direct proportion to the amount you lend on the vehicle relative to resale/auction value. Lending someone £10,000 on a car that’s worth £600 at an auction is dumb and is as good as writing a personal loan. Sure, cars still depreciate; however, you’re betting that the instalments made will help offset this problem.

A standard market value in the subprime sector is to lend retail value (mileage adjusted), using an agreed independent and updated valuation source (Glass Guide or CAP) in the hope you will obtain trade price at the auctions. For those not in the “know” circa 120-125% of trade represents the retail amount, however, prices do vary.
Operating in this manner, the dealership or seller makes enough profit out of the metal for it to be worth their while and the finance company “ideally” has an asset that can realise a good amount in the event of repossession and resale at auction. This will ensure that the loss isn’t total and those customers who pay will pay for those that don’t.

The only security superior to that of a vehicle, is obviously the security of a charge on the property.

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