Federal disclosure law may be the solution troubled homeowners need 

      In May of 1968, Congress determined that a law was necessary that would require lenders to make certain disclosures when providing consumer financing.  This law became known as the Truth In Lending Act (TILA).  TILA was amended numerous times, most recently in 1996.  Although the Act may seem largely superficial at first glance, it contains within it certain remedies that provide significant relief to homeowners struggling with their current loan and predatory lending. 

      One specific provision of TILA involves the "Three Day Right To Cancel Notice".  Anyone who has completed a refinance transaction is likely familiar with the forms that disclose how and when a borrower can cancel their loan.  The law requires that each borrower receive two copies of this notice, and that the notice is properly filled out.  The challenge is that most loan signings are conducted by a notary public who may, or may not have training in completing this critical step.  The failure by the notary to follow the strict rules required by TILA results in the borrower getting defective notices.  The result of defective notices is an extended right to cancel period.  The three day period becomes three years.  So what happens then when a borrower cancels their loan a couple years after it closed?  TILA requires that the borrower receive all interest and costs associated with the transaction back!  This can, and often does translate into tens of thousands of dollars for the homeowner.  Of course there are certain conditions and requirements, but a skilled attorney practicing in this area should be able to assist in navigating the process.  Attorneys can be expensive, but TILA has an answer for that too, the lender is required to pay all legal expenses. 

      TILA has many other predatory lending applications, particularly in the mortgage arena.  To better understand the Act and how it applies to your situation it is best to seek legal advice.  When searching for the right attorney, it is important to find one with experience in the mortgage industry.  A mortgage transaction has several key players and events that need to be thoroughly understood to truly maximize the remedies available in TILA.  As could be said with most areas of legal practice, this is just not covered in law school and unfortunately for me, no refunds are given. 

Many homeowners are unaware that they can fight back against their lenders and win!
 
The Truth in Lending Act (TILA) is a very powerful tool in preparing a defense against your lender for violations of predatory lending law. If  simple violations of the TILA can be proved in your loan documents, then you can sue your lender. That's great news in a market where borrowers think they have no defense against big lenders with deep pockets.

Even though these issues may be be insignificant to you, they are very significant in bringing suit against your lender. A simple review of your loan documents can uncover these predatory lending law violations and save your home. Many consumers are tricked into signing documents they don't understand. These same documents  cleverly hide fees like the yield spread percentage (YSP) and charges. Does your loan have a prepayment penalty? Maybe your lender paid money to your mortgage broker and your weren't aware of this "kick back"?

If you are a victim of predatory lending or mortgage fraud, it's sometimes possible to have your mortgage voided and to apply 100 percent of your payments to the principal balance.

A broker or lender has a responsibility to you as your agent to discuss all possible loan options with you and inform you of the advantages and disadvantages of each. You should not be pressured into applying for a loan that is not suitable for your needs or ability to pay.  

If you or someone you know might be a victim then please seek a qualified mortgage law attorney immediately. You may be eligible to have a loan modification or your entire mortgage rescinded.

Below are just some of the issue we address for our clients. Whether you are the victim of predatory lending, need a loan modification, short sale or any foreclosure help then please call an experienced licensed legal professional that can handle your legal manners. This isn't something you want to take lightly.

SOMETIMES IT'S BEST TO HAVE AN ATTORNEY HANDLE YOUR MOST IMPORTANT "LEGAL ISSUES" . The lenders have an attorney, do you?

Here is what we will do for you for $1,500 and you can call for a free, no obligation consultation at 310-860-4764

INVESTIGATION OF POTENTIAL STATUTORY VIOLATIONS: Truth-In-Lending Act ("TILA"), Home Ownership Equity Protection Act ("HOEPA"), Real Estate Settlement Procedures Act ("RESPA"), Regulation Z, or State Law

We review your loan documents (the papers you signed when you applied for the loan and the papers you signed when you closed the loan). We investigate whether the information provided in those documents was accurate, truthful, and met the requirements of the applicable federal and state statutes.

We look to what the lender, broker, and agent told you about the loan. We focus on whether the loan you were told you were getting was actually the loan you received.

We determine whether there were violations of federal law which give rise to the right to rescind the loan. If we are successful in rescinding the loan, you may be entitled to receive back all of the interest paid on the loan, all of the points and fees paid to get the loan, all fees paid by you to the lender in connection with the loan, and statutory penalties. This allows you to get a new loan with a smaller principle, meaning that it is affordable.

LOAN MODIFICATION: Loss Mitigation

We review the terms of your current unaffordable loan and then look to your credit scores, income, assets, and other such factors to determine what mortgage payment you can afford. If it seems reasonable that the lender will work with you to alter the payment terms to make the loan affordable, we negotiate the terms of the modified loan.

If successful, you save the expenses of getting a new loan, get a loan that you can afford, and protect you credit scores.

NEW LOAN

If it is unlikely that the loan can be rescinded, and you are unable to modify the current loan to make it affordable, we look to whether you qualify for a new loan with more favorable terms. Attorney Nathan Fransen, Esq. has been an active mortgage broker, and owner of a mortgage brokerage, for years. If a new loan is indicated, he can help you find the right program.

No matter which lender or broker you choose, we also offer a review your loan terms and loan documents. Thus, before you sign, we will explain the type of loan and the charges. We can help you avoid being a victim of predatory lending.

PROPERTY SALE

If it is unlikely that your loan can be rescinded, and you are unable to modify your current loan to make it affordable, we determine the value of your property to see whether a sale would be in your best interest. If your property can be sold for enough to pay your current mortgage off, you can protect your credit scores, and move to a more affordable home. If the value of your property is less than your mortgage amount, we may recommend a short sale or deed in lieu.

If a sale is recommended, we are able to broker the sale, work out the best terms for you, and protect your rights during such a stressful transaction.

BANKRUPTCY

We do not practice bankruptcy law, but there are some cases where your only viable option is to file bankruptcy. If we look to the potential sources of relief and determine that bankruptcy is in your best interest, we will refer you to an experienced attorney who practices in that field.

LITIGATION: Court Action

Many of our clients have been victims of fraud, elder abuse, racially motivated lending practices, and other civil wrongs which entitle them to monetary relief. We represent plaintiffs against lenders, brokers, agents, and notaries.

Many homeowners are unaware that they can stop foreclosure if they are the victim of predatory lending. There are legal remedies and laws that can and will protect you if you act in a timely manner and you build a solid case against your lender or broker.

Don't become a victim twice and lose your home!

Here is what our law firm does to protect our clients when they are facing foreclosure:

THE ISSUES WE EXAMINE:

● Truth-In-Lending or Other Violations Giving Rise to Rescission

We review our clients' loan documents (the papers they signed when they applied for the loan and the papers they signed when they closed the loan). We investigate whether the information provided in those documents was accurate, truthful, and met the requirements of the applicable federal and state statutes. 

We look to what the lender, broker, and agent told our clients about the loan. We focus on whether the loan our clients were told they were getting was actually the loan they received.

We determine whether there were violations of federal law and predatory lending law which give rise to the right to rescind the loan. If we are successful in rescinding the loan, our client may be entitled to receive back all of the interest paid on the loan, all of the points and fees paid to get the loan, all fees paid by the client to the lender in connection with the loan, and statutory penalties. This allows our clients to get a new loan with a smaller principle, meaning that it is affordable.

● Loan Modification

We review the terms of our clients' current unaffordable loan and then look to our clients' credit scores, income, assets, and other such factors to determine what mortgage payment they can afford. If it seems reasonable that the lender will work with our clients to alter the payment terms to make the loan affordable, we negotiate the terms of the modified loan.

If successful, our clients save the expenses of getting a new loan, get a loan that they can afford, and protect their credit scores.

● New Loan

If it is unlikely that the loan can be rescinded, and the clients are unable to modify the current loan to make it affordable, we look to whether they qualify for a new loan with more favorable terms. Attorney Nathan Fransen, Esq. has been an active mortgage broker, and owner of a mortgage brokerage, for years. If a new loan is indicated, he can help his clients find the right program. 

No matter which lender or broker you choose, we also offer a review your loan terms and loan documents. Thus, before you sign, we will explain the type of loan and the charges. We can help you avoid being a victim of predatory lending.

● Property Sale

If it is unlikely that the loan can be rescinded, and the clients are unable to modify the current loan to make it affordable, we determine the value of the property to see whether a sale would be in their best interest. If the property can be sold for enough to pay the current mortgages owed, our clients can protect their credit scores, and move to a more affordable home. If the value of the property is less than the mortgage amount, we may recommend a short sale.

If a sale is recommended, we are able to broker the sale, work out the best terms for our client, and protect their rights during such a stressful transaction.

● Litigation (Court Action)

Many of our clients have been victims of fraud, elder abuse, racially motivated predatory lending practices, and other civil wrongs which entitle them to monetary relief. We represent plaintiffs against lenders, brokers, agents, and notaries.

Understanding the California predatory lending law is essential for both consumers and professionals. As more news comes out in regards to the foreclosure crisis, the more cases are being brought against lenders, brokers and other real estate professionals.

Many homeowners are losing their homes when they shouldn't because they were placed into a mortgage by a predatory lender. Sometimes there were mistakes that were made inadvertently, but most of the cases are blatant fraud and the companies that sold these toxic loan are crooks.

So, how does a homeowner know if they are a victim?

Our law firm's clients include people who were victims of the following:

PREDATORY LENDING - This term can apply to all aspects of the mortgage industry and refers to the practice whereby a creditor put a borrower into a loan that the borrower will probably not be able to repay;

BAIT AND SWITCH - This commonly used tactic is where a creditor promises a low interest loan but then delivers a higher rate at closing;

FAILURE TO DISCLOSE LOAN TERMS - Federal laws like the Truth In Lending Act ("TILA") and the Real Estate Settlement Procedures Act ("RESPA"), as well as many state laws, require that creditors disclose certain terms of loans to borrowers, and when those terms are not disclosed or are inaccurately disclosed these laws provide severe monetary penalties against these creditors;

IDENTITY THEFT AND FORGERY - These brazen behaviors have become prevalent in the mortgage industry and my firm is seeing a lot of forged loan documents, deeds, and other papers which were created using information stolen from loan applications;

EQUITY THEFT - Also called equity skimming, refers to the situation whereby the same creditor refinances the same property with the same borrower multiple times and uses the equity in the borrower's property to cover the costs of the loan in such a way that it seems like the new loans had lower payments and did not cost the borrower a dime. However, the reality is that the property's equity was being drained with each refinance;

RACIALLY MOTIVATED LENDING PRACTICES - Both federal and state law prohibit the mortgage industry from providing different loan terms to people based on race, sex, ethnicity, or other protected class. While this practice is often not apparent at first glance, you can see how it arises when loan documents are written in English yet signed by borrowers who do not speak English. Such a transaction may be subject to a cause of action under the Unruh Civil Rights Act or other law;

ELDER ABUSE AND FRAUD - Because retirees often have a large amount of equity in their homes, they are prime targets for greedy and crooked creditors. We have seen mortgage sellers cold call elderly homeowners and then scam them into a loan which they do not need, can not afford, and which provides the seller with an incredibly large commission.

Understanding the predatory lending laws in your state is the first thing you need to do. If you think you might be a victim then you need to understand that you have a serious defense to fight your lender and stop foreclosure.

This is a question and answer session with Nathan Fransen and Paul Molinaro conducted by Moe Bedard, homeowner advocate and founder of http://www.loansafe.org/.

Q: How do I know if I've been a victim of predatory lending?

Paul:
Start by comparing the loan you got with the one you thought you were getting. Are the terms the same? That is, is your Annual Percentage Rate ("APR") the same as the one you were quoted? Are your total monthly payments the same as you were told they would be? Is there a prepayment penalty, and if so, were you told about this prepayment penalty?

Nathan:
While it's always a good idea to read and try to understand every page of every document before you sign, a set of loan documents is a daunting read for most borrowers. Thus, many borrowers rely on their broker or loan officer to thoroughly explain all the important parts of the documents and to make sure that the documents state exactly what terms were agreed. Unfortunately, your broker and loan officer make more money by getting you to pay higher closing costs, accept a higher interest rate, and by locking you into a loan by adding a prepayment penalty. These brokers and loan officers may not be upfront about these unfavorable terms when explaining them to you.

Q: Okay, I've read my loan documents, and I think I've been lied to and I am the victim of predatory lending. What can I do?

Nathan:
Call or visit a mortgage law attorney in your state with your questions. This attorney should be able to review your documents, confirm your suspicions, and tell you what you can do to either get out of your loan or get compensation for any damages you have suffered as a result of that bad loan.

Paul:
Some violations of the Truth in Lending Act are so easily spotted that it takes an experienced mortgage attorney just a few minutes to uncover them. Other violations are harder to find and require recalculations of the loan figures to discover. We are often able to meet with a potential client, reviews the loan documents, and discusses how the loan was done. We are usually able to determine whether there was a violation within 30 minutes, and then advise the borrower whether he or she has a case worth pursuing.

Q: What kinds of predatory lending cases are worth pursuing?

Paul:
If a potential client has refinanced his or her primary residence, that is, the home he or she lives in, then one of the first things we look at is the "notice of Right to Cancel" which is also called the Three Day Right of Rescission. A borrower usually has three days after signing loan documents to change his or her mind and cancel the loan. The borrower must be told of this right in writing. If the creditor fails to properly provide notice of this right to cancel, the right of rescission may be extended for up to three years.

Nathan:
When the right is extended for three years a borrower can rescind the loan at any time before three years, meaning that the loan is treated as if it never existed. Essentially, the borrower becomes entitled to all profits made by the creditor as a result of this loan. This means that the creditor must refund all interest paid, all closing fees, all broker fees, and even pay for the borrower's attorney fees. As you can imagine, this amount can be quite significant.

Paul:
The extended right of rescission is a powerful tool to help borrowers who have been victims of predatory lending, and helping our clients exercise this right is often the first step in holding a creditor responsible for illegal behavior.

Q: How do I get more information?

Nathan:
If you're in California, call our office. We will help you understand your rights, understand your loan, and determine whether you have been a victim.