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Buying a home is stressful enough, but some financial institutions and other organizations linked to home buying fees are accused of predatory lending practices. Among the alleged practices are charging excessive mortgage fees and closing fees, violating the Truth in Lending Act, abusing force placed insurance, illegally foreclosing on homes, and discriminatory lending practices

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Charging Excessive Fees

Mortgage Excessive FeesThere are many fees associated with purchasing a home. These include title searches, title insurance, home inspections, and closing fees. Some of these fees are legitimate; however, companies may charge excessive amounts for activities associated with these fees. For example, a company may charge a borrower courier fees but bill more than the courier company charges them. Furthermore, companies may charge for the same services twice. They may bill once for paperwork under "paperwork processing," and a second time under a different paperwork heading. In reality, the consumer is being charged two times for one service.

The Truth in Lending Act (TILA) was created to protect consumers from lending fraud by requiring lenders to provide clear and accurate information regarding the terms and costs associated with a loan. Failure to do so—either by misrepresenting the fees or loan structure or by omitting important information—may result in the borrower terminating the loan and recovering all interest and fees returned to them.

In 2015, Wells Fargo agreed to settle a lawsuit concerning property inspection fees that were charged to borrowers who fell behind on their mortgage payments by 45 days or more. These inspections were ordered every 25 to 35 days until the borrower managed to get the mortgage payments up to date. Plaintiffs alleged the inspections were unnecessary and the true nature of the fees was hidden.

Predatory Mortgage Lending

Predatory mortgage lending activities put the homeowner at risk of foreclosure. Such activities include charging unauthorized fees, charging hidden fees at closing, refinancing loans when there is no benefit to the borrower, approving or offering a loan when the borrower does not have the means to repay it, offering excessively high interest rates, and failing to properly disclose figures or legally required documentation at the closing table.

Mortgage Fraud

Home Affordable Modification ProgramMortgage fraud is the intentional misstatement, misrepresentation or omission of information by an applicant or other parties when providing information while applying for a mortgage or insurance for a mortgage loan. Mortgage fraud for property occurs when the applicant falsifies information solely to purchase a property for primary residence.

It is illegal for a person or organization to encourage a mortgage applicant to lie on the application to secure a mortgage.

Mortgage Discrimination

Under the Equal Credit Opportunity Act (ECOA), it is illegal for lenders to commit credit discrimination on the basis of race, color, national original, sex, marital status, age, religion or whether the borrower receives public assistance. Although it is legal for the creditor to ask for this information in some situations, creditors cannot use that information to prevent a person from obtaining credit. Furthermore, creditors are never allowed to ask borrowers about their religion. The ECOA applies to anyone who participates in the decision to grant credit or in setting the terms of credit, including real estate brokers who arrange financing.

Mortgage HAMP ProgramIt is illegal for lenders to commit mortgage discrimination. Under the Fair Housing Act (FHA), it is illegal to discriminate in any aspect of residential real-estate transactions. This includes approving loans to buy, build or repair a dwelling; selling, brokering or appraising residential real estate; or selling or renting a dwelling.

Discriminatory practices include discouraging a person from applying for a mortgage, rejecting a mortgage application, imposing higher interest rates on a loan or requiring a larger down payment for discriminatory reasons such as age or race.

Mortgage Servicing Fraud

Mortgage servicing fraud is different from predatory lending because it occurs after a loan has closed. Mortgage servicers are most often third parties that are hired by the lender to perform the daily duties associated with collecting loan payments. Servicing fraud activities include making a loan appear to be in default even though the borrower has paid on time, not accepting proper loan payments, charging fees for collection letters and inspections, charging more interest than is owed and putting payments in suspense accounts with no cause. In some cases, the mortgage servicer is allowed to keep any fees associated with late payments, giving the servicer an incentive to make payments appear late.

Force-Placed Insurance

Mortgage DiscriminationForce-placed insurance is put in place to allow lenders to protect their interests in a property they have a mortgage on. In cases where the homeowner's insurance policy has lapsed, force-placed insurance protects the lender in case of fire or other catastrophe that affects the property. But homeowners allege because force-placed insurance is placed by the lender, the costs are generally unreasonably high, given the insurance actually provides less coverage than commercially available insurance.

Further, they say they've had the insurance force-placed even when they have an up-to-date insurance policy. Finally, some argue that when they provide proof of a new policy, the force-placed policy is not removed quickly enough. Some financial companies face allegations they received kickbacks for using force-placed insurance from certain companies and customers wound up paying for those bonuses.

In January 2016, PNC Bank NA agreed to pay $32.3 million to settle a lawsuit in Florida alleging the company overcharged consumers for force-placed insurance. Bank of America NA and HSBC Bank USA NA have also agreed to settle lawsuits linked to force-placed insurance.

Foreclosure Fraud

Many people who fall victim to unethical mortgage and predatory lending practices find themselves facing foreclosure on their home, sometimes through no fault of their own. In some cases, victims uphold their end of an agreement only to have the banks deny them modifications to their mortgages, issue delinquency reports to credit ratings agencies and foreclose on their homes.

In September 2016, a lawsuit was filed against Nationstar Mortgage, a mortgage-servicing company, alleging the company refused the payments of a homeowner, then charged thousands of dollars in fees for property inspections and disbursement insurance. According to reports, the lawsuit alleges negligence, fraud, and breach of contract.

Mortgage Fee Legal Help

If you feel you qualify for damages or remedies that might be awarded in a possible mortgage related lawsuit, please fill in our form to submit your complaint to a lawyer who will review your claim at no charge or obligation.
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MORTGAGE LEGAL ARTICLES AND INTERVIEWS

Reverse Mortgage Lenders Allegedly Prey on Seniors
Reverse Mortgage Lenders Allegedly Prey on Seniors Chicago, IL For some seniors, the money offered through a reverse mortgage can be a lifesaver. People living on a fixed income might not have enough money to make ends meet in the case of illness or injury, so money obtained from a reverse mortgage lender can seem like the ideal solution. Unfortunately, some reverse mortgage lenders are accused of unethical tactics, including misleading seniors about the risks associated with a reverse mortgage so they experience a reverse mortgage default and their home is foreclosed [READ MORE]

LawyersandSettlements.com Reports 70 Percent Spike in Mortgage Claims
LawyersandSettlements.com Reports 70 Percent Spike in Mortgage Claims Santa Cruz, CA (Press Release) While the aftermath of the sub-prime mortgage crisis has seen a number of large U.S. banks defending themselves against charges of misconduct, new data reported by LawyersandSettlements.com indicates consumers are still being impacted by the crisis. Mortgage-related complaints submitted to the legal news website have continued to increase year-over-year as readers continue to seek out legal help in dealing with foreclosures and discriminatory lending practices [READ MORE]

Deutsche Bank Hit with Mortgage Lawsuit
Los Angeles, CA: The Los Angeles city attorney recently filed a mortgage lawsuit against Deutsche Bank AG, claiming it was responsible for allowing a number of foreclosed properties to fall into disrepair [READ MORE]




READER COMMENTS

Posted by
AlwaysGrace
on
After years of fighting with United Bank West Virginia I am finally forced to lose everything. Yet just weeks ago a FBI agent (retired) with 30 years of fraud investigation experience stated after spending weeks pouring through documents " this bank put in place practices and proceedures to manufacture foreclosure of high equity properties". " This is not a civil case but a Criminal Fraud Case".

United Bank West Virginia used extreme mortgage servicing fraud to force me into a mediated settlement whereby the bank could ultimately foreclose on a high equity property.

United Bank West Virginia was Not crediting payments for 7 to 20 days.

Once United Bank West Virginia took over 35 days to credit payments to mortgage and HELOC accounts. An investigation by the bank would find the teller gave receipts but then didn't know what to do with the payments so he put the checks on a bank vault shelf and forgot about them.

United Bank Virginia Accepting payments For a loan they did not own for over six years. Giving time / dated receipts in person on due date.

United Bank Virginia had the same look, and same name, same logo's, same letterhead, same colours as the United Bank West Virginia bank. On their website it to this day references being able to use offices in a multi state area.

United Bank West Virginia And United Bank Virginia employees at all times referred to separately owned financial institutions as a 'branches' !!!

a judge ruled years after fraud was completed United Bank West Virginia and United Bank Virginia were totally separate banking institutions. Bank employees were told to deceive about separate institution status at every turn. So much so that in a deposition their bank officer continually referred to the separate bank as a 'branch'. Even knowing the deposition was to establish whether the bank was one company or two.

United Bank West Virginia Denying me copies of my HELOC statements for over 4.5 years, to force the banks control of my money, my payments and my accounts.

United Bank West Virginia ginning up excel spreadsheets in lieu of producing HELOC statements as required by law.

United Bank West Virginia's lawyer denying the existence of HELOC statements in Jan of 2012. No one made mention of HELOC statements again until August of 2012 when a complaint was attempted to be filed with the federal reserve in Richmond. Suddenly within six hours statements were delivered. Only to avoid a 20 million dollar fine. Damage had already been done, credit destroyed small woman owned business gone due to banks practices and procedures. Yet federal reserve must have assisted the bank in avoiding a mandatory fine.

Forcing me to open a checking account in United Bank Virginia when allowing me to open the account in United Bank West Virginia would have allowed me to transfer all payments myself and to see all statements on both mortgage and HELOC myself.

United Bank West Virginia fraudulently denied me access to my accounts online as well as mailing HELOC statements.

Continuing mortgage transfers while stopping payments of only the HELOC,

AT THE SAME TIME instructing their collections person she would be terminated if she notified me of the bank was creating a default situation.

United Bank West Virginia Fraudulently reporting my HELOC account late for three months. Yet United Bank West Virginia had instructed their people not to notify me they stopped transferring funds. Balance was sufficient at all times with no further deposits from me, to keep loan current at all times.

United Bank Virginia allowing the release of over $100,000 from my checking account with no permission from me. Based so let on a phone call from United Bank West Virginia. No paperwork was ever asked to be formally signed until after damage was done to credit.

Refusing to correct my falsely destroyed credit knowing it would destroy my small woman owned business. United Bank West Virginia had based the income approval in my loans based on my business doing well. United Bank West Virginia Knew destroying my once successful business would force me into foreclosure.

United Bank West Virginia Created and mailed a letter with fraudulent Information on my payment status and denied ever transferring any monies across state lines when they clearly were documents lies, created to make it look to my legal representation that I had continuously made my payments late. Every single payment was made in person on or before the due date each and every month.

United Bank West Virginia Fraudulently stated in same letter I was lying about what had happened with my payment status. I was the one who could not be believed. Yet this was diametrically opposed to the documented receipts that I stood in line personally to get.

United Bank West Virginia And UNITED BANKSHARES INC have walked away Scot free from any charges relating to mortgage servicing fraud and as a reward for their behavior are getting a high equity property.

Loretta Lynch promised us these white collar criminals would go to jail. When is going to start. I am willing to supply all my documentation for a index case.

Posted by
Martin marine
on
OK how can I go after the lenders for predatory lending first one was Seterra's which was an old countrywide loan second so I can is called Silverlake which was a hard money loan Silverlake is one for closed on me and have my house sold why am in the middle of the bankruptcy and trying to see how I can go after these fools for damages and what have you and see what I can do about this you can you can email me or you can also contact me by phone so 14336 Looking into my rights as a homeowner what legally I can do because I've been taking a vantage of lied to me when I was in distress and what have you and didn't told while while I'm in bankruptcy unprotected and I would not lose my home from the bankruptcy attorney I need to find out what I can legally do about that as well to find out some things on the 17th when I go to court and see if there something I can do about this because this is ridiculous

Posted by
Kentucky
on
Chase took over two years to approve me for a loan modification, losing or claiming not receiving documents. Added to my income when there was no need to in order to qualify me for a loan modification.

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