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Loan Modification Attorneys Under Investigation

Over the course of the last year, federal laws regarding loan modifications have changed radically.  Between the end of George W. Bush’s presidency and Barak Obama’s new administration, federal laws  have opened new opportunities for homeowners to avert foreclosure and have access to loan modifications.

Basically, there are four core laws which create the guidelines for all mortgages.  These laws attempt to make the guidelines uniform, based upon equality and that they be administered fairly.  All lenders are required to operate under certain rules, regulations and procedures when taking loan applications.  The rules are: the Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act (TILA), Equal Credit Opportunity ACT (ECOA) and the Fair Credit Reporting Act (FCRA).  Some of these laws are quite old and were passed in a very different era, but Congress hopes that these rules provide the kinds of guidance that will help people borrow money to get a home without being taken advantage of.

RESPA requires lenders to give a good faith estimate of all closing costs that you are likely to pay.  The hope is to keep the borrower from being forced to pay hidden fees at closing.

TILA requires that annual percentage rate (APR), term of the loan and total costs be disclosed to a borrower prior to extending credit to the borrower.  This information must be obvious on documents presented to the consumer before signing, as well as on periodic billing statements (although that is less often).    Obviously, subprime mortgages, and other “creative†forms of mortgages, may have violated this law.

ECOA prohibits any discrimination in lending based on race, creed, religion, national origin, sex, marital status or age.  Discrimination does not just mean refusing to give a mortgage, it could also mean taking advantage of people and giving them unfavorable mortgage terms just because of their minority status.  

FCRA promotes accuracy, fairness and privacy of information in the files of consumer reporting agencies.  When you apply for a mortgage, the lender always pulls a credit report and FCRA gives you access to the report they pull.  If you have ever been rejected for a credit card, you will doubtless have received a letter explaining the decision and informing you of your right to view your credit report; this is due to FCRA.

California loan modification attorneys are familiar with the state and federal laws governing loan modifications, as well as how those laws can be used to benefit your situation.  If you are facing foreclosure, there is a chance that your mortgage company might have violated one of these statutes.  This could be used as leverage either during a loan modification or even during litigation.  The federal government is still investigation how often mortgage companies such as Countrywide violated these laws in selling people subprime mortgages.  Having a mortgage with a highly fluctuating interest rate certainly seems to violate some of the federal laws mentioned above, as does the tactic of lying about the borrower’s income (which some real estate agents did quite often).  A loan modification attorney can be a big help in figuring out just how the laws governing mortgages can benefit you.

About the Author:

Loan Modification Help Center is a free gathering place for resources and information on the rapidly evolving field of loan modifications. The internet is over flowing with information on this subject with the problem being that there can be as much bad information and advice as good. For a homeowner struggling with mortgage payments and facing the possibility of foreclosure, the importance of getting straightforward information with no agenda or ulterior motive is of utmost importance. The resources we make available at Loan Modification Help Center are just what homeowners need as they seek to understand their options and get the information they need to make the critical decisions involved in a loan modification. For more information about loan modification programs visit loanmodificationhelpcenter.org.

Source - Loan Modification Help Center – Federal Law Governing Mortgage Lending

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Predatory Lending Act

Question: Isn't the Bush administration responsible for creating the imminent depression?

In 2003 the Bush administration's Office of the Comptroller of Currency (OCC), a part of the Department of Treasury, invoked a clause from the 1863 National Bank Act to preempt state laws against predatory lending, thereby rendering those state laws inoperative.

The OCC also formulated new rules prohibiting states from enforcing any of their consumer protection laws against national banks.

So anyone who saw what was going on and wanted to try to stop the predatory lending had their hands tied by the Bush administration.

So basically, the Bush administration gave a green light to their financial buddies on Wall Street to rob Americans blind, and drive the US into a recession in the process.

What a big surprise, considering that Bush has ties to the financial industry.

So shouldn't we be thanking the Bush administration for creating our next depression?

Answer: It is his policies which are at fault, so, yes, Bush would be responsible for the mess that we are currently in.

As far as those who are trying to blame Clinton (don't worry, Clinton has enough blame which should be placed on him with NAFTA) BUSH could have STOPPED whatever Clinton put into place! Another words, Bush is responsible for implementing it. I know that Bush stopped all the clean air laws from going into affect...this is no different!

Is it not interesting that right around 2003 is EXACTLY when we first started having problems with the housing market? Things that make you go, Hmmmmmm.

Rep. Frank - Mortgage Reform and Anti-Predatory Lending Act

Predatory Lending Lawsuits On The Rise

Back when the housing market was hot, lenders were qualifying borrowers for loans who were probably never able to qualify for a home loan before.  These borrowers are now upside down on the mortgages because the rates adjusted and they can no longer afford their homes, in turn most are going into foreclosure, or being forced to sell through a short sale. 

In turn, homeowners and the government are taking more and more of these institutions to court, stating unfair and predatory practices. While most of these suits are still finding their way through the legal system, most banks have already settled for millions of dollars. 

Wells Fargo, Countrywide Financial and Citigroup are just a few among the rest of the defendants.  Borrowers who are suffering with such issues are turning to the legal system to save their homes.  Many professionals say they have not seen so many cases in over 23 years. 

Some Homeowners are seeking the courts' help individually, while others are serving as part of class action lawsuits. With foreclosures continuing to rise, borrowers are looking to force banks to modify unaffordable loans or to stop them from foreclosing on homes. Often, they also seek money for loss and damages. 

Banks have faced lending lawsuits and have paid millions of dollars in settlements. But the recent housing boom was fueled by questionable loans that many borrowers had no hope of repaying, because realistically they would not be able to afford it in the long run.

During the housing boom the mortgage industry went after the middle-class borrowers, these people are able to hire attorneys and go after the lenders.  Borrowers in a more sticky financial situation, are turning to attorneys who take payment when the case is won.  In most cases when an attorney is hired to help against the foreclosure of their home, they win the case. 

There are also a ton of class action suits on behalf of thousands of homeowners. A lot of the class action cases are because borrowers were originated payment option adjustable-rate mortgages. This loan allows you borrowers to make very low monthly payments, with the unpaid interest added to the principal balance of your loan. Most borrowers have ended up defaulting on their payments because of this.  The purpose of the lawsuits are to get the lenders to restructure the loan to make it more affordable for the borrower.  This lawsuit will also seek damages for those borrowers who have already lost their homes or paid off their loans.

State attorneys general are also filing suits against the industry's key players, stating deceptive business practices. The California-based lender agrees to do some more loan modifications and not to foreclose upon up to 2,200 loans without notifying the attorney general's office and seeking court approval in certain circumstances.   Attorney Generals continue to hold the lender liable for this nightmare they have caused so many people. 

Bank of America agreed to spend $8.4 billion to lower the interest rates or loan balances of nearly 400,000 Countrywide customers with subprime loans or payment option ARMs.  The number one lender in the Country is now responsible for giving out loans that the borrowers could not afford 

Although there has been in increase in lending disputes, there aren't as many lending lawsuits as expected, considering the how big subprime loans were during the housing boom. These suits are expensive and difficult to win.  Said cases could take anywhere from months to years to resolve.  

This lending crisis has left many people in a bind.  Seeking proper legal help is the only way to insure you get out if it in one piece. 

About the Author:

Yanni Raz is a mentor for many in the Real Estate Mortgage industry, Yanni Raz is been tutoring many homeowners in California and help some also to save their homes. http://www.homesinsale.com

Source - Mortgage Lenders Being Sued