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Home > Issues & Initiatives > Predatory Mortgage Lending

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Predatory Mortgage Lending
See also Foreclosure Prevention
Predatory mortgage lending is stripping billions of dollars in precious assets from low-income communities across the nation. Seeking to exploit vulnerable and unsophisticated borrowers, predatory lenders charge more in interest and fees than is required to cover the risk of making the loan. Unfortunately, many predatory practices are perfectly legal under the current regime of federal laws and most state laws.
The subprime lending market, where predatory lending primarily takes place, has exploded by 795 percent over the last decade, from a roughly $43 billion market in 1994 to a $385 billion market in 2003. Due in part to abusive terms and practices, the foreclosure rate for subprime loans is much higher than prime loans: 1 of every 12 subprime mortgages will go to foreclosure, compared to 1 in 100 for the prime market. According to a number of studies, predatory lending disproportionately affects minority homeowners and communities.

i contacted my Senator And Comptroller of banks

I Wrote letters to my state senator and filed a complaint with the comptroller of banks .here is the comptroller info any one should do this not sure if it helps but hey
-------------------------------------------------------------------------------- If you want us to communicate with your attorney or other legal representative directly, please provide the information below. Your submission of this portion of the form authorizes our office to release information to your attorney or other legal representative if requested. Relationship: Attorney ___ Representative ___ Not Applicable (Skip Section) _X_ Please indicate the type of authorization you have granted to your Attorney or Representative : Power of Attorney ___ Letters Testamentary ___ Court Appointed Executor or Administrator ___ Other ___ Name of Representative: First Name: Middle Name: Last Name: Street Address: City: State: Zip: Phone: E-mail: What is the best way to contact your representative? When is the best time to contact your representative? FINANCIAL INSTITUTION OR COMPANY INFORMATION THAT IS SUBJECT OF THE COMPLAINT
-------------------------------------------------------------------------------- Helpful Hint: If you don't know the name of your bank, check your bank or credit card statement. The bank's name will be indicated on the statement. Name of Financial Institution or Company: HSBC MORTGAGE COMPANY Street: 577 LAMONT ROAD City: ELMHURST State: IL Zip: 60126 Phone: 6306177000 Type of Account(s): (If you are unsure of the type of account(s), please contact your financial institution for assistance.) Deposit Account (Checking, Savings) ___ Credit Card ___ Loan Product(Consumer, Mortgage, Home Equity) _X_ Insurance ___ Asset Management (Trust Accounts) ___ Consumer Leasing ___ Insurance ___ Non-Deposit Account (Investments) ___ Other ___ Have you tried to resolve your complaint with your financial institution or YES If Yes, when? 06/06/2009 How? Has the financial institution responded to your complaint? YES If Yes, when? 07/01/2009 How? Mail Contact Name: TRUSTEE SHAPIRO AND SUTHERLAND LLC Title: TRUSTEE COMPLAINT INFORMATION
-------------------------------------------------------------------------------- Describe events in the order they ocurred, including any names, phone numbers, and a full description of the problem with the amount(s) and date(s) of any transaction(s). Be as brief and complete as possible to make the explanation clear. Do not include personal or confidential information such as your social security, credit card, or bank accounts numbers. Ibought my house in 1989 through oregon dept of veterans assumable loan for 39,000.00 . in 1998 i refinanced with Beneficial Finance Of Oregon now owned by hsbc bank. Beneficial paid off my mortgage with ODVA For less than 39,000.00 plus I BORROWED ABOUT 20,000 TOTAL THATS IT MAKES MY BALANCE OF OWED MONEYS AT THAT TIME MAYBE ABOUT 60,000.00 - + .Since that first refinance with beneficial THEY BENEFICIAL HaVE refinanced my home at least 5 times never any money out for me, just their idea according to them to save me money. I Was not real smart about these things back then (still not) but everytime they did this it added about 12,000.00 to my loan balance even though they were paying themselfs off each time they charges me a huge fee for early payoff each time, thus totally eating my equity with out my knowledge, I DID NOT UNDERSTAND the whole picture of what they were doing or even how I Got to owe them 144,000.00 on my 39,000.00 house untill it was way too late. now about 10 - 12 years later they are forclosing on my home of 20 years, Because I GOT INTO A HARDSHIP , With a broken neck and had to be placed on a hardship program back in 2001 . Since that time as i became aware of what they were doing to me I 3 TIMES TRIED TO REFINANCE to get my home away from them, But after each time i got approved for a loan . Beneficial would either raise the payoff and kill the loan or the last time they said they lost my file for over 2 weeks, Forced me to file chapter 13 bankruptsy while they tried to locate my files.Now they are forclosing again this time my house is to be sold on November 12 2009 because of the hardship program they put me on in 2001 they beneficial finance have not recorded even one of my monthly payments to my account in the positive column all payments for ten years have gone to interest and late fees, because of their hardship program puts you in constant default.Due to this dishonest operating practice we are losing our home only because they can get away with it.Why dont you folks here and other gov. agency`s do something to protect the comsumer even if we are not very educated in mortgage laws. do we deserve to loose everything we have in our lifes?To some huge bank with more money than god? This is appalling whats going on in this country to people every day. This statement is absolutely true I Swear to god and I`m asking for help now please. Before another defenseless family ends up homeless for what? Please be advised that the issues described in this complaint will be shared with the financial institution or company in question. PRIVACY ACT STATEMENT
-------------------------------------------------------------------------------- The solicitation and collection of this information is authorized by 15 U.S.C. - 57a(f) and 12 U.S.C. 1 et seq. The information is solicited to provide the Office of the Comptroller of the Currency (OCC) with data that is necessary and useful in reviewing requests received from individuals for assistance in their interactions with national banks. The provision of requested information is voluntary. However, without such information, the ability to complete a review or to provide requested assistance may be hindered. It is intended that the information obtained through this solicitation will be used within the OCC and provided to the national bank that is the subject of the complaint or inquiry. Additional disclosures of such information may be made to: (1) other third parties when required or authorized by statue or when necessary in order to obtain additional information relating to the complaint or inquiry; (2) other governmental, self-regulatory, or professional organizations having: (a) jurisdiction over the subject matter or the complaint or inquiry; (b) jurisdiction over the entity that is the subject of the complaint or inquiry; or (c) whenever such information is relevant to a known or suspected violation of law or licensing standard for which another organization has jurisdiction; (3) the Department of Justice, a court, an adjudicative body, a party in litigation, or a witness when relevant and necessary to a legal or administrative proceeding; (4) a Congressional office when the information is relevant to an inquiry initiated on behalf of its provider; (5) Other governmental or tribal organizations with which an individual has communicated regarding a complaint or inquiry about an OCC-regulated entity; (6) OCC contractors or agents when access to such information in necessary; and (7) other third parties when required or authorized by statute.
Date: 10/5/2009 1:40:43 AM
I certify that the information provided on this form is true and correct to the best of my knowledge. I Certify _X_ I Do Not Certify ___ If a valid OMB Control Number does not appear on this form, you are not required to complete this form.

ALWAYS REMEMBER THIS

Here's some other information
You have the right to demand to see the ORIGINAL BLUE INK paperwork you signed. If the NOTE can't be produced with your blue ink signature, there is no note that can be lawfully collected against. Never acknowledge your signature on a mortgage document unless it is your signature in the blue ink you used at the closing. Anything less than the ORIGINAL document is a forgery and not admissible as legal tender.
You have the right to demand the alleged holder of the note prove the loan was closed lawfully.
You have the right to rescind your mortgage up to three years later under certain circumstances.
You have the right to question anything that you don't understand.
You have the right to back out of the loan if the "Good Faith Estimate" you received a minimum of 3 days prior to the closing does not match the one at the closing.
bad link I`ll check on that

This Is Excactly whats happening to us right now

e number of frauds that can be committed by your lender is limited only by the lender's imagination and their estimation of education and financial ability. If they peg you as financially uneducated and of limited means, your lender is likely to use whatever means he can get away with to force you into foreclosure.
Mortgage fraud is more common than you'd like to believe. Even large, well known, mortgage companies have been prosecuted by the Federal Trade Commission for unlawful practices. Google 'Mortgage Fraud' and you'll be shocked out of your chair with the number of hits you get. You'll find them all, GMACM (which is also Ditech), Countrywide and a host of others.
Here are some of the names or descriptions of the various frauds mortgage companies/brokers use:
Formulated foreclosure/mortgage servicing fraud/closing fraud. Where the lender rechecks your credit information and your payment history to put you into a situation where you can't afford the monthly payment. Examples are:
Yield Spread Premium - This practice was originally intended as a way to avoid charging the borrower any out-of-pocket fees. However, many feel the intentions have been misguided, and have ended up as just another fee the borrower gets stuck with. Be careful to review your HUD-1 or Good Faith Estimate to see what this fee is, and why it’s being charged. You shouldn’t be charged both a YSP and an origination fee. This would mean the broker is charging you twice. Please also note that the verbiage can vary, and may read as “par-plus pricing”, “rate participation fee”, “service release fee” and so on. Make sure you go over each fee to ensure you don’t get duped!
Brokers will also charge a YSP as a way of providing a “No Closing Cost” loan. Basically the broker will charge a YSP large enough to offset any upfront fees the borrower would have to pay, and still end up with enough to make a decent commission. An example would be a broker that charges no points, but charges a YSP of 2% on a $400,000 loan. The total compensation to the broker is $8,000, and the fees associated with the loan may be $3,500. The borrower won’t have to pay the $3,500 as it will be subtracted from the broker’s YSP of $8,000, still leaving the broker with $4,500 commission. It sounds alright, but the rate the borrower receives will be substantially higher than it would be at par.
Yield Spread Premium or YSP are fees paid by the mortgage lender to a mortgage broker in return for the delivery of a loan that carries a higher interest rate. The higher interest rate is the interest rate above the par rate. A par rate is a rate at zero points. Points are expressed as a percent of the loan. Each point is typically one percent of the loan amount. One point for a $300,000 loan is $3,000.In other words, YSP is the money paid to the mortgage broker. This is one way mortgage brokers receive more money for each loan. The mortgage broker will quote a higher (than par) rate and in return receive money back from the mortgage lender. In this case, the lender will pay the broker points for booking the borrower into a higher interest rate.Conversely, lenders charge the points to the borrower for rates below the par rate. For example, borrowers will pay points when they buy down the rate. The excess points charged by the mortgage broker go to the lender so that they can receive a lower rate.
Yield spread premium is a major issue in the mortgage industry. Some interest groups call them “illegal kickbacks” stating yield spread premium is a referral fee from the mortgage lenders to the mortgage brokers. Other critics charge that mortgage brokers steer their clients to lenders who pay yield spread premium so the broker can reap bigger fees. There are some brokers who "price gouge" unsuspecting borrowers. However, mortgage brokers don’t need YSP to price gouge borrowers. The mortgage broker can simply charge more points to the borrower.According to the Department of Housing and Urban Development, yield spread premiums serve a purpose by helping to reduce closing costs. In return for a higher interest rate, yield spread premium allow borrowers to pay lower fees at closing. This option helps low-income borrowers to be able to buy a house without having to worry about the huge closing costs. The majority of loans with yield spread premium, the fees are used to offset the borrower’s closing costs. The mortgage broker pays the borrower’s closing costs with the YSP. The difference is what the mortgage broker earns.Borrowers are not aware about the yield spread premium until they sign the loan documents. The broker is not required to disclose the amount until the HUD-1 Settlement Sheet is prepared which is a day or so before closing. To avoid a surprise closing, ask for a good faith estimate. The good faith estimate should include all transaction fees – direct and indirect – and the specific services earning those fees. Don’t be afraid to ask questions if you are unsure of anything on the good faith estimate. You should be able to shop from broker to broker and compare total fees and rates.
There is a lot of controversy surrounding this practice, and an ongoing fight between mortgage brokers and institutional lenders. Brokers must disclose the YSP, whereas institutional lenders can avoid disclosing it as their yield spread may not be determined until a later date when the loan is sold on the secondary market.
Escrow shortages - where each year your escrow account is short the money needed to pay your taxes and insurances. At the end of the year they will give you a choice of adding the shortage to your monthly loan payment if you don't pay the shortage in one lump sum.Most people wind up having the shortage cut up and pay it monthly. But while you're making these larger payments, the servicer isn't collecting enough to pay your escrow items again. You wind up short again the next year and your payment goes up again. After a couple of years, you can't afford the payment any longer. Boom they foreclose and take your home.
Escrow padding - Adding charges to your escrow that were not agreed upon at the time of closing. This is where they charge you for insurances they claim you need, your taxes went up, your insurance went up or late fees where they held your payment until it was late. When the late fee kicks in, that's when they apply the payment and create a shortage in your escrow account.
Suspended payments - This is where you make your payment every month but they fail to apply the payment to your account. After 3 months they begin to foreclose on the house. They know you most likely can't afford an auditor or an attorney to go over your account and determine what the lender did with your payment.You can even show them the canceled checks but they'll ignore and foreclose on your home. This will add thousands of dollars in costs to your loan. Then once they've sold your home they find those payments but use them to pay the costs of the foreclosure.Without the aid of an attorney, you're screwed. Most people can't afford the $2,500.00+ retainers.You can even file a complaint with your State's Attorney General, but the chances of them coming to your rescue, even though you have all the proof in the world the lender set you up to fail, are very slim.
Force placed insurance - This is where a lender will buy an insurance you either already have or they claim you need. A perfect example of an insurance that most servicers try to tack on to your monthly payment is "Flood Insurance." You'll get a letter that says the National Flood Insurance Act of 1994 says you have to carry flood insurance. They expect that you'll take their word for it an pay the extra amount. Most times they know the insurance is not available for your property because you're not in a flood zone and it's purchase is voluntary or your town/city is not a participant in the National Flood Insurance Program.Since they can't buy the insurance, they are really just pocketing the money. If you ask them for a copy of the insurance policy they will tell you they don't have to show it to you. They will refuse to supply you with any information regarding the policy. Why? Because the chances are they didn't buy anything.Another scam servicers use is the force placing of hazard insurance. The premium for hazard insurance is usually included in your monthly escrow payment. Once a year your lender sends your insurance company a payment for a hazard policy and you get a receipt from the insurance carrier along with a policy number and a copy of the new policy. Even though you've received that from the insurance company the lender claims you're not covered and, like the flood insurance, force place the hazard insurance on your account. After a couple of months, they notify you that you failed to carry the policy and are now charging you for an additional policy.Even if you're luck enough to get them to acknowledge the fact you already had the insurance, good luck getting them to refund the unearned premiums. If you ask them for information regarding the insurance they claim was purchased, you'll get nothing. Your out a couple of hundred dollars and no where to turn because chances are you can't afford an attorney and in most cases it's an odds on bet your state won't help you, even if you hand them the smoking gun.
Unlawful foreclosure - this is where the lender or its servicer create the circumstances of your alleged default. Above are some examples of how they do that. There are strict laws in each state regarding the tracking of mortgage documents and who owns the mortgage note.If you happen to find yourself in foreclosure and you see a company listed on the paperwork called Mortgage Electronic Registration Systems, Inc. (MERS) the foreclosure is not going to be valid. Only the owner/holder of the NOTE, not the mortgage contract, can foreclose on a mortgage. If you separate the mortgage contract from the mortgage note (both have two different names as the owner/holder) in most states the loan does not exist.Here's some other information
You have the right to demand to see the ORIGINAL BLUE INK paperwork you signed. If the NOTE can't be produced with your blue ink signature, there is no note that can be lawfully collected against. Never acknowledge your signature on a mortgage document unless it is your signature in the blue ink you used at the closing. Anything less than the ORIGINAL document is a forgery and not admissible as legal tender.
You have the right to demand the alleged holder of the note prove the loan was closed lawfully.
You have the right to rescind your mortgage up to three years later under certain circumstances.
You have the right to question anything that you don't understand.
You have the right to back out of the loan if the "Good Faith Estimate" you received a minimum of 3 days prior to the closing does not match the one at the closing.

HOPE A LITTLE HOPE

AUGUST 7 2009 I WROTE A LETTER TO A GUY I MET IN A ONLINE FORUM AND TODAY HE ANSWERED ME WITH SOME I HOPE VERY GOOD ADVICE SO I1M GOING TO START ON THIS MONDAY MORNING. HERE IS HIS LETTER
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Thanks for your concern. Go to your local county recorder office and give them your name and home address. Ask them to show you how to locate your trust deed informantion on the computer. View these documents to determine how much you borrowed, what the interest rate is, how much your ballon payment is and the cost associated with not paying the ballon payment on time. If this does'nt add up to the $133,000.00. Contact your Mortgage Bankers Association department, BBB, Consumers Affair for your area and file a complaint and ask them to help you resolve the situation. Last but not lease, if it gets down to the wire. File chapter 13 and make your payments on time as best as possible! DO NOT UNDER NO CIRCUMSTANCES DISMISS THE BK AT THE REQUEST OF YOUR LENDER. UNLESS YOU GET IN WRITING FROM THEM THAT THEY WILL FIX THE PROBLEM! GOOD LUCK!

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BELOW IS THE LETTER I SENT TO HIM
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Life In Hell With A Beneficial Finance Mortgage

On Fri, Aug 7 2009> . My name is Rudy Gentry I Live in Milwaukie, Oregon I am having> big problems trying to hang onto my house i have missed some payments> and now in forcloser on my home of 20 years, I`ll try to make this> brief just give you the important issues and maybe you can give me a> little advice. Back in 1988 i bought a house by assuming a va loan for> aprox. 39,000.00 then in 1997 i wanted to make some home approvemants> and pay a few bills so i refinanced my 39,000.00 aprox mortgage to> Beneficial Oregon Finance company they loaned me about 15 thousand and> paid off some bills thats it.I Went on with my life, well the next year So I Called Beneficial and they said they would write up the paperwork> and we could come by and sign them. I said Great so we did that<> i will always regret 2 years later I broke my neck and was put out of work due to my injuries, later to find out I WOULD BE DISABLED FOR LIFE. And at the time of my injuy we realised we were going to have> some financial troubles so we contacted Beneficial mortgage and my> wife setup some deals that would move a few payments to the back of> the loan and modify the loan to give us a chance to readjust to our> new income as i was devastated about my physical condition and trying> to concentrate on a recovery that was not happening, My wife took the> financial problems for awhile. Well after about a year i decided to> start checking our finances again to see if we could maybe start> living a little less stressfull financially. What I figured out was SHOCKING> After all these refinances and changing the loans and things like this (not really sure what they did)> But we now owe Beneficial 133,000.00 approx. this is for my refi of> 39,000.00 VA mortgage in 1997 ? Like I Said I DID Borrow about 15 thousand and> i think we charged another 7000.00 to our credit line AT THE MOST PROBABLY NOT THAT MUCH AT ALL.around the time> of my injury so that would put my balance on the high side at about 60-65 thousand> i figure with fees as i never checked the loan docs like I Said> earlier but NO WAY WE BORROWED THIS MONEY TO EQUAL 130,000.00 NOW THEY ARE Forclosing Any way how they got to this amount is totally criminal in nature it has to be because we simply did notborrow that money and they are forclosing on us because we fell behind and they wanted a 31,000.00 baloon payment that I Could not or will not pay. Is There any help for me that you know of? we have a sale date of nov.7 2009 any advice will be appreciated thank you> PS I Am stating these facts with estimates of actual price values but they are very close to actual amounts.And this is the truth. We have constantly asked this company for records as we never got monthly or yearly statements though we have requested many many times in writing.