Tag Archives: Loan

PREDATORY LENDING IN CALIFORNIA

20 Jan
U.S. Subprime lending expanded dramatically 20...

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The California Reinvestment Committee (CRC) is currently conducting a study weighing the effect predatory lending has had on Californians. The preliminary findings suggest predatory lending is a very common practice in California:

  • 73% of all borrowers saw key loan terms (e.g. interest rate, fixed versus adjustable mortgage, prepayment penalty) change for the worse at the closing of the loan as compared to what was represented to them;
  • 61% of all borrowers had loans containing prepayment penalty provisions which lock borrowers into bad loans by assessing a fee of several thousand dollars if borrowers pay off their subprime loans early;
  • 64% of borrowers reported refinancing their home loans from two to six times, suggesting widespread “loan flipping” and “equity stripping” by lenders;
  • 39% of borrowers reported that the idea to take out a loan secured by their home came from the marketing of subprime lenders. Aggressive marketing through telephone calls, mailers and broker solicitations, was experienced by most study participants.

Although the study is still in its infancy, the preliminary numbers leave no room for doubt that predatory lending has become a tremendous problem in California and is robbing Californians of millions of dollars. The discrepancies in prime loan interest rates and those offered by the subprime lenders has steadily increased.

Subprime lenders state that they serve a very important function, mainly providing credit to borrowers with imperfect credit histories. However, it is this exact premise, the supposed benevolence of subprime lending, on which predatory lenders rely to justify their practices, thereby blending financially feasible subprime lending into predatory lending. Financial Code § 4970 is California’s remedy to this problem.

What is predatory Lending ( Making a loan to get the Real estate not a loan you can afford)

20 Jan
English: Then Secretary of Housing and Urban D...

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DEFINING PREDATORY LENDING

Predatory lending encompasses a variety of practices. The most prevalent of these practices, however, is predatory lending in connection with home mortgage loans. These loans are targeted at homeowners who may be living on fixed or lower incomes, and those who have checkered credit histories.

Unlike most prime loans, subprime mortgage loans are generally based on the equity in a borrower’s house instead of his or her ability to make the scheduled payments. Therefore, problems meeting scheduled payments frequently arise due to the borrower’s lack of liquidity, a problem obviously foreseeable, yet ignored, by the lender. When this occurs, the predatory lender encourages the borrower to refinance the loan into another unaffordable loan, thus increasing the loan amount owed, primarily due to new finance fees. This “refinancing” severely decreases the borrower’s equity in his or her home and is a common practice referred to as “loan flipping.”

Another practice utilized by predatory lenders is “packing.” This is the practice of surreptitiously placing lender-protective credit insurance or other goods and services into consumer loans. For example, a predatory lender will state a fixed monthly payment to the borrower. Upon closure, however, the loan papers will include numerous single premium payment insurance policies which need to be added to the quoted monthly payment. These insurance policies are not mentioned during the loan negotiations as an additional cost. The lender ultimately hopes the borrower will not notice the added charges at all; if, however, the borrower is lucky enough to recognize the hidden costs, predatory lenders are equipped with numerous tactics to force the loan through despite the borrower’s misgivings. The most prevalent tactic is to threaten the closing of the loan by stating that deletion of the challenged costs will either cause delay, or effect the borrower’s loan eligibility. Given the financial situations of most of these borrowers, the threat of not receiving the loan, or even just a delay in the closing of the loan, can be enough to make the borrower forget about the added charges

Although many borrowers become aware of these hidden charges when they receive their first statement, other hidden terms and penalties are included that become apparent only when the borrower decides to get out of the loan.

One of the most potent tools used by predatory lenders to keep borrowers defenseless is the prepayment penalty. According to Standard & Poor’s, subprime loans contain prepayment penalties 80% of the time, while prime loans only 2% of the time. Since it is lower income individuals who are targeted by predatory lenders, the threat of thousands of dollars in prepayment penalties obviates the lenders fear of the borrower prepaying the balance through a more affordable prime loan. The prepayment penalties trap the individual in a long-term unaffordable loan that can only be refinanced by the lender who misrepresented the loan terms in the first place.

Predatory loans can be financially devastating. A borrower owing up to three times as much as he or she has borrowed is not an uncommon occurrence with a sub-prime predatory home mortgage loan.

Challenge Your Lender… Now!

13 Dec

Don’t delay – Opt in to the follow Blog and gain access to over 680 ideas and posts to hold your Lender accountable new post every day!

Do you want to hold your lender responsible for their illegal actions?

Challenge Your Lender… Now!

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My name is Timothy McCandless, and I’m here to tell you what most banks and mortgage loan servicers don’t want you to know: More than 65 million homes in the US may not be subject to foreclosure after all, and your home is very likely one of the “safe” homes. The reason these homes are not technically subject to foreclosure is because the lenders, mortgage companies, mortgage servicers, and title companies broke the law throughout the process of managing your loan, both at the inception of your loan and throughout the life of the loan. Because of their fraudulent actions, they are unable to produce a title for, or show ownership of, your property. This causes what we call a “defect of title”, and legally prohibits your lender or servicer from foreclosing, regardless of whether or not your loan is current.

This situation is all over the news, and now, starting today, you can learn how to protect yourself from unlawful foreclosure.

WE CAN TRAIN YOU HOW TO CHALLENGE YOUR LENDER

Most Mortgage Assignments are Illegal

In a major ruling in the Massachusetts Supreme Court today, US Bank National Association and Wells Fargo lost the “Ibanez case”, meaning that they don’t have standing to foreclose due to improper mortgage assignment. The ruling is likely to send shock waves through the entire judicial system, and seriously raise the stakes on foreclosure fraud. Bank stocks plummeted after this ruling. These assignments are what people need to challenge in their own mortgages.

I am prepared to show you the most amazing information on how you can actually Challenge Your Lender. Once you opt in for our free ebook (just enter your email address above and to the right), you’ll get immediate access to our first, very informative webinar, as well as to our free ebook. You’ll learn more about the Challenge Your Lender program, and more importantly, how the US mortgage system is rigged to take advantage of you and how to can fight back. My program will show you exactly how to get a copy of your loan documents that your lender or loan servicer currently has in their possession, and then how to begin examining these documents to learn more about how your lender, as well as other parties involved, has used your name and credit to make millions of dollars. Analyzing your loan documents is a crucial first step in beginning the Challenge Your Lender process.


Save your home from foreclosure

The information that you will be receiving in my free material and webinar will further your knowledge on what most lenders are doing to homeowners, and how you can save yourself from foreclosure. You will have the opportunity to acquire a free copy of my Challenge Your Lender workbook and learn how to begin building the paper trail that you will need to defend yourself and to prove the wrongdoings of your lender and loan servicer. Once you go through the workbook and listen in on the free webinar, you will be on top of your Challenge and ready to begin the program.

The Challenge Your Lender program will help put you in a position of power and control over your loan, and will allow you to decide what you would like to do with your property. This leverage will be advantageous when you begin negotiating your foreclosure. Most importantly, your lender or loan servicer should not be able to foreclose on you once you notify them that you have identified fraudulent activity. My program is your first step in saving your property from foreclosure.

Don’t wait – opt in today. Every day counts in the battle against your lender.

Best regards,
Tim

The lawyer is not competend to testify

5 Oct

If the lawyer is not a competent witness with personal knowledge, then he should shut up and sit down.

So you sent a QWR and you know the loan is securitized. The orignating lender says talk to the servicer and the servicer declines to answer all the questions because they didn’t originate the loan. Or you are in court and the lawyer is trying to finesse his way past basic rules of evidence and due process by making representations to the Judge as an officer of the court.

He’s lying of course and if you let it go unchallenged, you will lose the case. Basically opposing counsel is saying “trust me Judge I wouldn’t say it if it wasn’t so.” And your answer is that the lawyer is not a witness, that you don’t trust the lawyer or what he has to say, that if he is a witness he should be sworn in and subject to cross examaintion and if he is not a witness you are entitled to be confronted with a real witness with real testimony based upon real knowledge.

First Questions: When did you first learn of this case? What personal knowledge do you have concerning the payments received from the homeowner or third parties? What personal knowledge do you have as to who providing the actual cash from which the subject loan was funded?

Only when pressed relentlessly by the homeowner, the servicer comes up with a more and more restrictive answer as to what role they play. But they always start with don’t worry about a thing we control everything. Not true. Then later after you thought you worked out a modification they tell the deal is off because the investor declined. The investor is and always was the lender. That is the bottom line and any representation to the contrary is a lie and a fraud upon the court.

So whoever you sent the QWR to, always disclaims your right to ask, or tells you the name of the investor (i.e., your lender) is confidential, or that they have authority (but they won’t show it to you). That doesn’t seem to be a lender, does it? In fact they disclaim even knowing enough to answer your questions.

So AFTER THEY SERVE YOU with something file a motion to compel an immediate full answer to your QWR since under TILA service on the servicer is the same as service on the lender. You argue that everyone seems to be claiming rights to be paid under the original obligation, everyone seems to be claiming the right to enforce the note and mortgage, but nobody is willing to state unequivocally that they are the lender.

You are stuck in the position of being unable to seek modification under federal and State rules, unable to sell the property because you don’t know who can sign a satisfaction of mortgage or a release and reconveyance, unable to do a short-sale, and unable to refinance — all because they won’t give a simple answer to a simple question: who is the lender and what is the balance claimed by the real lender on the obligation? At this point you don’t even know that any of the real lenders wish to make a claim.

This is probably because they received TARP funds and insurance proceeds on defaults of pools that they had purchased multiple insurance policies (credit default swaps). But whether they are paid by someone who acquired rights of subrogation or they were not paid, you have a right to a FULL accounting and to know who they are and whether they received any third party money. If they were paid in part or otherwise sold their interest, then you have multiple additional unknown parties.

The reason is simple. They are not the lender and they know it. The lender is a group of investors who funded the transaction with Petitioner/Homeowner and others who purchased similar financial products from the same group of participants in the securitization chain relating to the subject loan.

The people currently in court do not include all the real parties in interest for you to make claims against the lender. Cite to the Massachusetts case where Wells Fargo and its lawyer were subject to an $850,000 sanction for misrepresenting its status to the court.

It is not enough for them to bluff their way by saying that they have already answered the interrogatories. When they lost and it came time to allocate damages and attorneys fees, Wells suddenly said they were NOT the lender, beneficiary or current holder and that therefore the damages and attorneys fees should be assessed against the real lender — who was not a party to the pending litigation and whom they refused to disclose along with their misrepresentation that they were the true lender.

It is not enough that the lawyer makes a representation to the court as an officer of the court. That is not how evidence works. If the lawyer wants to represent facts, then he/she should be sworn in and be subject to (1) voir dire to establish that he/she is opposing counsel that it came from some company.

The witness must be a competent witness who takes an oath, has personal knowledge regarding the content of the document, states that personal knowledge and whose testimony conforms to what is on the document.

There is no such thing as foundation without a witness. There is no such thing as foundation without a competent witness. So if the lawyer tries to finesse the subject by making blanket representations to the court(e.g. the property is “underwater” by $xxx,xxx and we need a lift of stay…yet, there is no certified appraisal entered into evidence with a certified appraiser that can be cross examined…just a statement from opposing counsel) point to Wells, or even point to other inconsistencies between what counsel has represented and what now appears to be the truth, and demand an evidentiary hearing. If the lawyer is not a competent witness with personal knowledge, then he should shut up and sit down.

File a motion to extend time to file adversary proceeding(in BK situation), answer, affirmative defenses and counterclaim UNTIL YOU GET A FULL AND COMPLETE ANSWER TO YOUR QWR so you can determine the real parties in interest and serve them with process. Otherwise, we will have a partial result wherein the real owner of the loan can and will claim damages and injunctive relief probably against all the current parties to this action including the Homeowner.

In short, the opposing counsel cannot just make statements of “fact” and have them accepted by the court as “fact” if they don’t pass the sniff test of real evidence corroborated by a competent witness. …and with every pleading ask for an evidentiary hearing and attorneys fees. Follow rule 11 procedure in Federal Court or the state law counterpart so you can get them later.

Usury is comming back as a viable cause of action

17 Jan
Loans

Loans (Photo credit: zingbot)

USURY: The trial court improperly granted a motion for summary judgment on the basis that the loan was exempt from the usury law.

1. The common law exception to the usury law known as the “interest contingency rule” provides that interest that exceeds the legal maximum is not usurious when its payment is subject to a contingency so that the lender’s profit is wholly or partially put in hazard. The hazard in question must be something over and above the risk which exists with all loans – that the borrower will be unable to pay.
2. The court held that the interest contingency rule did not apply to additional interest based on a percentage of the sale price of completed condominium units because the lender was guaranteed additional interest regardless of whether the project generated rents or profits.
3. The loan did not qualify as a shared appreciation loan, permitted under Civil Code Sections 1917-1917.006, because the note guaranteed the additional interest regardless of whether the property appreciated in value or whether the project generated profits.
4. The usury defense may not be waived by guarantor of a loan. (No other published case has addressed this issue.)wri_opportunityloans_v_cooper

Lender liability predatory lending foreclosure

2 Sep
Loans

Loans (Photo credit: zingbot)

Today mortgage loans, particularly more expensive loans marketed to those with poor credit histories, are likely to be purchased by investment trusts, bundled into large geographically diverse pools with many other loans, and sold as securities to investors. … Assignee liability rules render the holder of an assigned mortgage loan liable for legal violations made in the origination of the loan. … If a mortgage loan is covered by the relatively narrow scope of HOEPA, then the lender must deliver a special advance warning at least three days prior to consummation. … HOEPA goes further than any other federal statute in creating assignee liability for predatory mortgage lending. … Similarly, it may not be clear how state predatory lending statute assignee liability provisions should be interpreted if the underlying mortgage includes a waiver of defense clause, and the state has not banned those clauses in consumer contracts. … the primary mechanism for distributing liability to a secondary wrongdoer for predatory origination is by assignee liability rules, including the common law of assignment, section 141 of the TILA, the HOEPA’s due diligence standard, and various state predatory lending provisions. … The FTC’s holder-notice rule steers a responsible middle road on this question by capping investor liability at the amount paid by a consumer under the loan in question. …

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