Predatory Lending Laws

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What Is Predatory Lending Laws?

Predatory lending describes a practice where a person is offered a loan or a mortgage at a high interest rate in exchange for the deed to the property, or some other valuable form of collateral. By the terms of the loan, if the borrower does not pay back the entire loan, the lender can acquire property in lieu of repayment, and will often sell it for a significantly higher value than the loan.

Recently, predatory lending has grown significantly. Each year, nearly one million loans are made with unreasonable terms and abusively high lending fees. Many of these victims are the elderly, poor, or minorities, who may not have financial resources to acquire a more favorable loan or the education to avoid falling prey to these loans. Because of these terms, many of these victims are unable to pay their loans, and their property ends up in foreclosure. 

What Are Some Common Predatory Lending Laws?

Some common predatory lending practices include: 

How Do I File a Claim against Predatory Lenders?

The law provides many different grounds by which a claim can be brought against a predatory lender. These can include suits based on violations of: 

Violating many the above statutes can result in steep fines and money damages to the borrower. In addition, there may be local or state statutes that offer remedies for predatory lending claims. For example, the U.S. Department of Housing and Urban Development (HUD) funds many housing couneling agencies designed to help borrowers avoid foreclosure.

What Can I Recover from Predatory Lenders?

What a person may recover from predatory lenders depends partly on what doctrine a claim is brought against the lenders.  Some remedies that may be available can include: 

Do I Need an Attorney for a Predatory Lending Claim?

If you feel you have been a victim of predatory lending, and as a result your house is about to be foreclosed upon, you should consult an experienced real estate lawyer or foreclosure attorney to discuss your legal remedies and options. A lawyer can help you file any necessary paperwork, and if need be, represent you in court.

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Last Modified: 04-05-2017 12:56 AM PDT

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