What makes a home loan a predatory loan?

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If you get a loan and the mortgage broker never asked for income verification, never asked for you to fill out a financial page such as expenses, other loans, etc. and you questioned him about that and said “Doesn’t matter they have investors” would you consider this predatory lending? He just asked for 2 year income tax (1year the business had a loss in profits) and a saw a good credit report. How about they sent the papers for you to sign and then had to mail them back? If this is predatory lending how do you go about taking action? Was told that they gave the loan based on good credit rating by someone in the real estate business. Only serious answers only please.

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5 Comments
  1. Reply
    Steve D
    May 16, 2011 at 3:37 am

    The method of making the loan (signature, tax form verification of income, etc.) does not make the loan predatory. What makes the loan predatory is charging an unfair or injurious interest rate = especially to someone with no where else to turn. If you have good credit and your interest rate is say under 6%, there is nothing predatory about the loan you describe. If you are the borrower, the only person that could complain (assuming you get near a market interest rate) is the lender, who could accuse the broker of falsifying the loan records to get the approval.

    As far as I can tell, if you are the borrower, no one twisted your arm nor were you given unfair terms or put under any duress during the process.

  2. Reply
    Kenneth
    May 16, 2011 at 4:35 am

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  3. Reply
    mynewkeys.com home loans by Cal
    May 16, 2011 at 5:12 am

    Sounds like you are self employed.. by asking you for your tax returns, you lender did in fact ask for income verification. And it is very common to mail out papers and ask for signatures and have them sent back via mail. Based on what you supplied, it looks like your lender did everything properly. These days is near impossible (but still happens) to be a predatory lender…. they really cracked down and tightened up a lot of open loopholes. Are you not happy with your loan? are you having buyers remorse?

  4. Reply
    Us Loan Auditors
    May 16, 2011 at 6:11 am

    If you were put into a stated loan without knowing what you actually qualified for with using your full documentation then you have a case. It could be a difference of having 5.5% full documentation loan compared to a 7% going stated!! The most common reason a loan officer put people in to a stated loan program was because they could not qualify with their actual income. If the loan officer set you up to fail from the beginning then yes it is predatory lending. Also by over inflating income they were lying to the investors who might be purchasing these loans. In today’s market it is impossible to do so because of mess it created.
    I’m currently helping a man out that purchased 3 homes at one time for investment. He made 40k a year and had no ability to pay these mortgages but the realtor he came in contact with said it was a great idea with the way the market was going. Rent the properties out for a few years and then sell them for a profit. There is now way out of the loans now and they adjust this year. I hear it everyday about a realtor or loan officer promising they could see the future and assuring the client everything will keep going up.
    You should definitely have a professional examine your loan documentation and story of what you were promised. These are the keys to finding out if you have a case strong enough to hold the banks accountable for putting you in the position you are in now. Even if the loan was easy to handle when you got it look in to this. There are millions of loans out there that have State and Federal violations attached to them!!

    Kenny

    US Loan Auditors

  5. Reply
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