Foreclosure Article


Predatory Lending Schemes and Scams

Beware Of Predatory Lending Schemes

Most mortgage lenders are reputable and provide a valuable service by allowing families to own a home without saving the thousands or hundreds of thousands of dollars necessary to buy it outright. However, a few, unscrupulous lenders, especially those who make high risk second mortgages, engage in predatory lending practices that can increase the likelihood that a borrower will lose his or her home to foreclosure. These abusive practices include making a mortgage loan to an individual who does not have the income to repay it, charging excessive interest, points and fees or repeatedly refinancing a loan without providing any real value to the borrower.

Borrowers facing unemployment and/or foreclosure are frequent targets of predatory lenders because they are desperate to find any "solution" to their default.

Homeowners frequently receive refinance offers in the mail telling them that they have been "pre-approved" for credit based on the equity in their home. When you are wondering how you are going to pay your mortgage and other bills, it may appear very attractive to borrow against your house. But consider this, if you cannot make your current payments, increasing your debt, even if you get some temporary cash, will make it harder to keep your home.

Beware of Scams:

  • Equity skimming: a buyer offers to repay the mortgage or sell the property if you sign over the deed and move out.
  • Phony counseling agencies. Some groups calling themselves "counseling agencies" may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself for free, such as negotiating a new payment plan with your lender, or pursuing a pre-foreclosure sale. If you have any doubt about paying for such services, call a HUD-approved housing counseling agency at (800) 569-4287 or TDD (800) 877-8339. Do this before you pay anyone or sign anything. Don't sign any papers you don't fully understand.
  • Make sure you get all "promises" in writing.
  • Beware of any contract of sale of loan assumption where you are not formally released from liability for your mortgage debt.
  • Check with a lawyer or your mortgage company before entering into any deal involving your home.
  • If you're selling the house yourself to avoid foreclosure, check to see if there are any complaints against the prospective buyer. You can contact the Arizona Office of the Attorney General Consumer Fraud Unit for this type of information.
  • Do not sign anything you do not understand. It is your right and duty to ask questions.
  • Information is your best defense against becoming a victim of predatory lending especially for a desperate homeowner! 

Where to Report Suspected Predatory Lending – homeowners can contact the Arizona Office of the Attorney General, or call 1(800) 352-8431 to get information on what steps to take to file a complaint. You may also want to look at Predatory Lending Brochure from the Office of the Attorney General. 

For more information about Predatory Lending go to:

HUD's Predatory Lending Web Site

Attached Document
.pdf Predatory Lending Schemes and Scams


Comments:

QUESTIONS

  • I am behind $8000.00 dollars on my mortgage. I know they will send a foreclosure notice soon. I have been struggling due to having a medical issue both my wife and myself (Heart Attack). Is there away to keep my home from foreclosure with a a program available to me? I am still working and my wife cannot find employment in Kingman as it is a small town.I have had to file ch-13 and I am still making payments to the court trustee monthly.
  • The home I'm renting (leased through August 2015) was foreclosed on and there's a new owner. Do I have to pay rent to the new owner if I'm leaving in 6 weeks? Or do they have to give me an eviction notice? The new owner is demanding rent, but she doesn't have the deed yet, just a proof of purchase receipt.
  • My home was in the middle of probate when they sold it so prior to bank sold it to company and because there wasn't somebody legally responsible for the loan hence I had to probate it before anybody at company would discuss it with me, and they granted me executorship a week after the sale. I then had a stroke and was in hospital, court papers scheduled in a few days to go to court. I want to keep my house of 17years what can I do? Please help fast. I am a widower of a vet and on disability as well.
  • Can my wages be garnished after a foreclosure? ?
  • How can I legally kick out family members? I own home they have been staying with more for over a year. Some occasionally contribute to rent but mostly don't. I have asked severe times in past 6 months to love out now I have given a 2 month telling them by September 1st but doesn't look like ahyones making plans and just freeloading and being lazy and I can't take it anymore Mom brother, sister . How do I legally get them to leave ?
  • I have a trustee sale date on my house 10/10/2013. Have a review for the Dept. of Justice modification still in review. Have had 9+ letter/certificates from (Proper name redacted) , paperwork has been filed with the maricopa County Recorders office as well of Foreclosure listed on my credit report. I am job hunting as well and many employers put in requirements a credit check so this makes it even more difficult for employment. I want to keep my home and receive an "affordable" modification ,not one which is higher than my original payment. Please advise help for me. Thankyou...
  • Can I get specifics on Foreclosures and how long before I go into foreclosure do have to make a payment?
  • my home had a foreclosure hearing in November but today i received a letter saying. Motion to withdraw motion for summary and default judgement entry and decree of foreclosure and vacate hearing. what does this mean? Thank you in advance for your time
  • I recieved a Notice of Substition of Trustee. The recorded date that shows on this notice when my mortgage lender appointed the as a successor trustee shows a recording date of September 15, 2008. Which today is September 2 , 2008, so how can something have been recorded on a date that has not even happened yet? The sale is scheduled for September 5, 2008. What are my legal rights as to getting this sale postponed?
  • Can the county foreclose on my condo due to non-payment of RE taxes?

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OTHER LEGAL RESOURCES

  • State Bar of Arizona
    www.azbar.org
  • Maricopa County Bar
    www.maricopabar.org
    Referral number 602-257-4434
  • Pima County Bar
    www.pimacountybar.org
    Referral number 520-623-4625
  • National Domestic Violence Hotline
    800-799-7233
  • Bankruptcy Court Self Help Center
    866-553-0893
  • Certified Legal Document Preparer Program
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