LMS :: Practice Areas - Predatory Lending

Predatory Lending

Predatory lending is a particular type of fraud and theft that has become increasingly prevalent in the last decade. It refers to the targeting and taking advantage of economically vulnerable, unsophisticated or inexperienced borrowers such as those who are in, or facing, foreclosure, low-income borrowers, minorities, the elderly or otherwise disadvantaged borrowers. The most common schemes defraud the borrower of their home, equity, and/or money by providing those without access to mainstream lenders with what appear to be good loans. More often than not the loans and lenders are not what they appear to be and the affect on the borrower can be devastating.

Predatory lending is generally performed by seemingly well-intentioned mortgage lenders and brokers who use cloak and dagger tactics to lure the borrower into bad loans. Many times the loans have hidden costs and fees, unreasonably high interest rates and insurance policies or other services that the borrower did not agree to or even know about. Predatory lenders also claim to be able to help those with large debt and those in or nearing foreclosure erase their debt and save their homes by providing confusing or poorly explained loans that they know the borrower ultimately cannot afford. When the borrower cannot make the payments, the lender forecloses, takes the equity in the home and sells it, leaving the borrower homeless and penniless.

There is much legislation by both the State of California and the United States that aims to protect homeowners and borrowers who may be at risk of predatory lending, and more legislation will undoubtedly be passed in the near future to deal with the predatory lending epidemic in our state and country. According to these laws, among many other things, all lenders are required to present the borrower with certain documents and explain and provide certain information. Unfortunately, this makes navigating through, and keeping up with, this area of law difficult to do without an attorney. If you feel that you may be a victim of predatory lending, please call our office at
(415) 543-5050 for a free over-the-phone consultation with an attorney.

Items to Prepare for Initial Consultation and Future Claim

The grant deed or any other documents relating to your ownership in your home.

Any and all documents relating to your loan, refinance, contract with the lender, information from the title company, information from the escrow company, and information from the mortgage broker, if any.

Any and all documents that the lender may have provided but which are not related to your loan, refinance or contract, such as brochures, pamphlets, etc.

Any notes you may have taken while meeting with the lender.

A list of persons present at the meeting, both those who came with you to the meeting and those who were present on behalf of the lender, title company, mortgage brokerage, etc.

Where applicable, any documents that relate to foreclosure, i.e. notices of foreclosure, notices of intent to sell, notices of default, etc