MORTGAGE FRAUD / PREDATORY LENDING

Homeownership has always been the American dream. However, for some, it has come at a huge price. Unfortunately, those who have worked hard to realize the American dream have often become the targets of abusive lending practices by mortgage lenders, mortgage fraud by mortgage brokers and equity skimming scams by so called "foreclosure specialists."

Mortgage fraud can occur when future homeowners seeking to purchase a home engage the services of a mortgage broker to find a loan to secure the purchase of the property. Often times these brokers will engage the services of an unscrupulous appraiser who will appraise the home at an inflated and unreasonably high value. The higher the price of the loan used to secure the purchase price of the property, the greater the commission for the mortgage broker. Many times the mortgage broker will, with or without the consent of the buyer, place fraudulent income and assets on the loan application (URLA) to make it appear that the buyer can afford the loan. When this happens, the buyer is usually stuck with a home it cannot afford because he/she is "upside-down" on the mortgage. This means that the buyer is paying a mortgage that is higher than what the property is worth.

Predatory lending, although not necessarily illegal, is the tactic of packaging loans with high interest rates and points and selling them to persons, often times minorities and elderly. The loans involved (often subprime) allow many to realize homeownership. However, if they do not meet the formula outlined in the Home Ownership Equity Protection Act, these loans can be deemed illegal. Predatory lending also occurs when proper disclosures in violation of the Real Estate Settlement Procedures Act (RESPA) and/or Truth in Lending Act (TILA) are not made to homebuyers prior to closing on their future home.

Foreclosure specialists are those who tell homeowners that they will "save your home from foreclosure" when they face the common dilemma of being behind in their mortgage. Often times they will tell the homeowner to deed their home to them and require him/her to do a "rent-back" lease agreement until they get "on their feet." Many times the lease rent-back agreement is costlier than the mortgage itself and the homeowner is often evicted from their home after the equity has already been skimmed.

Often times homeowners don’t realize until it is too late and have already lost their home that they have been used and misled by these unscrupulous vendors.

If you have been the victim of any of these fraudulent schemes, Smith Graham & Crump, LLC will litigate on your behalf.