Today, we are going to discuss rampant issue of predatory lending and how to diagnose, if you have become a victim of predatory lending. We will give you a list of red flags, and you have to outline all these areas of red flags in a separate sheet while you show your documentation to any Attorney. Remember, and read again my post about the so-called loan forensic audits. I still, truthfully do not agree with what they do. They contact continuously and send me a “sample” forensic audit, and I consider it just a highly computerized data sheet.
I want you to save some money here. Remember, if they find any violations who is gonna sue? (Remember, who love ya baby!) Again, this is not meant to make you specialist. As usual always consult a Nevada licensed attorney. The warning signs of a predatory loan are broken down into three categories:
What Happened Before Signing?
1. What happened leading up to the signing of the loan documents? The Marketing and Sales of Mortgage Loans
2. What happened at the closing?
3. Post closing behavior of your lender.
Now, we are going to discuss all these one by one.
1. Were you a victim of aggressive solicitation of targeted lending practices?
2. Was you steered to high rate lenders?
3. Was there any door to door solicitation of home improvement or financing arranged by contractor or mobile home dealer?
4. Was there any large fee or kickbacks promised to the mortgage broker? Remember the YSP (Yield Spread Premium)
5. Was loan made or promised to mentally incapacitated, older, retired or fixed income group?
6. Was it started as a no-doc loan?
7. Was this loan in excess of 100% loan to value ration (LTV)?
The Application Process
1. Was there any falsification on loan application?
2. Was signature forged?
3. Was co signer properly introduced into the documents?
1. Was this a high interest rate (APR)?
2. Was there high fees and closing costs?
3. Was a balloon payment involved?
4. Was there a negative amortization?
5. Was there high appraisal costs?
6. Was there an inflated appraisal?
7. Were fees highly aggressive?
8. Was there any back dating of any documents?
9. Was there a charging of duplicative services?
10. Did it require credit insurance?
11. Was there mandatory arbitration clauses?
12. Was the loan falsely identified as a line of credit or a business loan?
1. Was there rushed loan closing?
2. Were the terms at closing different from what the borrowers thought they would get?
3. Was there a failure to give clients at the time of closing?
4. Was the right of cancellation properly disclosed?
1. Was there a failure to pay off debts as promised?
2. Was there a flipping of the loan?
3. Was there a flipping of the property?
4. Was there abusive collection practices?
5. Was there any excessive prepayment penalty?
6. Was there any incomplete or inadequate home work done?