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Preparation of of this report was Preparation was conducted conducted by Americans Americans Against Against Mortgage Mortgage Abuse» Abuse™ [AAMA]. AAMA AAMAis is a a newly newly formed formed nonproft nonprofitestablished established to Cb combat predatory lending. AAMAISJmission AAMA’s mission is “to defend and protect Americans and the American defend and protect Americans and the American dream of of home home ownership ownership from from unlawful, fraududream lent, criminal, unethical and lent , criminal, unethical andillegal illegal acts.U acts.”
Our Goals Include: Our Goals Include:
1. Author 1. Authorand and conduct conductconsumer consumer and and educational educational researchinto into predatory predatory mortgage mortgage lending and research and mortgage abuses; mortgage abuses; editorials, articles 2. Author Author editorials, articlesand andreports reports on on predapredatory mortgage lending and mortgage abuses; tory mortgage lending and mortgage abuses; predatory mortgage lenders their 3. Cause Cause predatory mortgage lendersto tocease cease their predatory predatory lending lendingpractices; practices; 4. Cause Causepredatory predatorymortgage mortgage lenders lenders to to change change their policies, their policies, practices practices and and procedures; procedures; 5. Cause predatory mortgage lenders to provide provide fair, 5. Cause predatory mortgage lenders to fair, reasonableand andjust justcompensation compensation to to the the victims victims reasonable of their their predatory predatorymortgage mortgagelending lendingabuses; abuses; and sponsor seminars 6. Conduct Conduct and sponsor seminarsand andconferences conferences on combating combating predatory predatory mortgage mortgage lending; 7. Create a CdatabankUand Qlatabas&of predatory 7. Create a “databank” and “database” of predatory and employmortgage lenders, lenders, their executives executives and eesincluding including their direct ees direct business business and home home phone numbers, numbers, home homeaddresses, addresses, names names and numbers of neighborsand andfamily family memmemnumbers of spouses, spouses, neighbors bers; bers; 8. Create Create a a “databank” CdatabankUand QlatabaseUof predatory 8. and “database” of predatory mortgage lending articles, articles, reports, reports, complaints, complaints, cases,litigation, litigation, policies, memos, cases, memos, codes, codes, and litigation, and documents for regulation, litigation, and corporate resolution support; rate resolution support; forms and types 9. Define Define forms and typesof ofpredatory predatorymortgage mortgage lending practices, schemes and abuses; lending practices, schemes and abuses; 10. Draft, Draft, propose propose and put put forth forthcorporate corporate resoluresolutions, ordinances, tions, ordinances, regulations regulations and and laws laws on predapredatory mortgage lending; tory mortgage lending; 11. Educate the public, public, the on11. Educate consumers, consumers, the the courts, courts, C Congress and corporate America on predatory mortgress and corporate America on predatory mortgage lending practices, gage lending practices, frauds frauds and and schemes schemes and their consequences; their consequences;
12. Expose predatory mortgage lenders, their leadleaders and and supporters; ers Focus attention attention on on the national 13. Focus national and and commucommunity crisis nity crisis of predatory mortgage lending; 14. Infiltrate predatory mortgage lenders 14. Infiltrate predatory mortgage lendersand andexpose expose their illegal, illegal, fraudulent and and criminal criminal behavior; behavior; Insure that banks, banks, investment investmentfirms frms and and mortmort15. Insure gage servicers comply with Federal and state gage servicers comply with Federal and state laws lawsregulations; and regulations; 16. Investigate Investigateand and confirm confrm predatory 16. predatory mortgage mortgage lending lendingabuses; abuses; boycotts,letter letterwriting, writing, e-mail 17. Organize Organize protests, protests, boycotts, and telemarketing campaigns against predatory and telemarketing campaigns against predatory mortgage lenders, lenders, their their leaders leaders and supporters; supporters; media, civic 18. Provide Provide regulators, regulators, lawyers, lawyers, press, press, media, groups, State AGs AGs and and others investigroups, Congress, Congress, State gating mortgagelending lendingwith with a a“blue®luegating predatory mortgage printUand ( eneticUmap of how predatory lendprint” and “genetic” map of how predatory lenders operate operatetheir their various variousschemes, schemes, scams and ers scams and proprogramming gramming methods; methods; 19. Shed focusand andlight lighton onpredatory predatory mortgage 19. Shed focus mortgage lendlending ing practices; practices; and 20. Support airTand sonablet alternatives to 20. Support C “fair” and 4a “reasonable” alternatives to litigation mortgage cases. litigationin inpredatory predatory mortgagelending lending cases. PURPOSE OF OF REPORT PURPOSE REPORT
The purpose of this this report report is is to provide purpose of provide indi-
viduals viduals and and organizations organizations examining, investigating investigating
and studying studying predatory and predatorylending lendingand andmortgage mortgageabuse. abuse. Whether a journalist, journalist, law law maker, maker, lawyer, lawyer conconWhetheryou youare are a sumer advocate, advocate, banker, mortgage mortgage servicer, servicer, regularegulator or to provide provide tor or investigator, investigator, this this report report is is designed designed to you useful and topical facts, information and facts, information and data data on predatory lending. on predatory lending.
Our Objectives Include: Our Objectives Include:
1. Create Create A A Definition Definition Of 1. OfPredatory Predatory Lending; Lending; 2. Defining Various Forms Of Predatory 2. Defining Various Forms Of Predatory Lending; Lending; Predatory Lending Practices; 3. Highlight Highlight Predatory Lending Practices; Recommendations Suggestions; 4. Offer Offer Recommendations& & Suggestions; 5. Outline Outline Schemes, & Abuses; and 5. Schemes, Scams Scams & Abuses; and 6. ProvideInformation, Information,Facts Facts & &Data Data On OnPredaPreda6. Provide tory Lending. tory Lending.
A LENDING PRIMER PRIMER APREDATORY PREDATORY LENDING
we begin, begin, did did you you know that: Before we that:
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Government studies report report that that up to to 70% 70% U.S. Government percent of home home mortgage mortgage loans loans contain containerrors? errors? Accounting errors in home mortgage loans Accounting errors in home mortgage loans can can range from from a few hundred hundred dollars dollars to to tens tens of of thouthourange a few sands of of dollars? sands dollars? These so-called 6rrorstare These so-called “errors” are in many many circumcircumstancescomplex complexand and fraudulent fraudulent accounting stances accounting schemes that banks and mortgage companies schemes that banks and mortgage companies use use (lay with your moneyUto to “play with your money” togenerate generate additional cashflow, flow, income income and and profits? profts? cash Most companiesknow know that Most banks banks and and mortgage companies you wonUask won’t ask how how they theyC?alculatedTthe “calculated” the (?ay“payoffUor principal balance fgure they quote off” or principal balance figure they quote you? you? A well-known well-knownbank bankonce oncecharged charged a a customer customer $ 3000.00per permonth month for five months [over over $3000.00 $15,000] of $15,000] ofescrow escrow payments when the annual taxeswere were only$2,608.28 $2,608.28 and monthlyP P& &I taxes only and monthly payments were only around $790.00? payments were only around $790.00?
A well-known owned by a well-known mortgage mortgage servicer servicer owned major Wall Wall Street Street investment investment bank bank refers refers to its its customers as (muckstin their policy manuals? customers as “smucks” in their policy manuals?
Some banks banks and and mortgage mortgage companies companies have foreSome have foreclosed or or are foreclosing on homes, closed are foreclosing homes, notes notes and and deeds of trusts they donUeven own or have deeds of trusts they don’t even own have a right to? right to? Well-known in Well-knownbanks banks and and mortgage mortgage companies companies in Florida are are lying and providing perjured perjured testitestimony, false affidavits and and frivolous frivolous pleadings in mony, false affidavits pleadings in cases involving mortgage foreclosure to courts cases involving mortgage foreclosure to in in Florida? Florida? You or your your family You or familymembers members and and friends friends may may be be unknowingly be to these unknowingly becontributing contributing to theseabuses abuses by investments in in your having investments your own own IRAQ IRA’s,stocks, stocks, mutual or pension funds that are holding mortmutual or pension funds that are holding mortgage backedsecurities securitiesthat thatdeal dealwith with subprime subprime gage backed lending? lending?
White-Collar Mafia Uses 21st Century Loan Sharks To Prey 21st Centur y Loan Sharks To Prey On Helpless Americans! On Helpless Americans!
White-Collar Mafia Uses
For the single asset asset they willever ever own. Home Home ownership ownership For the majority majorityof ofAmericans, Americans, their theirhome homeis isthe thelargest largest single they will own. is part of the American American Dream. Dream. Yt today, disabled, disadvantaged Yet today,many manyelderly elderly,minority minority, disabled, disadvantaged and non-English speakingAmericans Americansare are livingthe theAmerican AmericanNightmare Nightmare rather than the American Dream. speaking living Dream. Their away by by 21st 21st Century loan Their dreams dreams of home home ownership ownership and and fnancial financial security security are are being being stripped stripped away loan sharksbacked backed by new white collar Mafa. Instead of using using guns guns and andknives knivesto tointimidate intimidate and and to to rob their sharks by aa new white collar Mafia. Instead of victims, phones, computers, computers, computer computer programs programs the the mail mail and victims, the the new new weapons weapons of choice choice are are phones, and unscrupulous unscrupulous lawyers. These extortionists, con-artists and predators inflict harsher pain, suffering and injury upon their their lawyers. These extortionists, con-artists and predators inflict harsher pain, suffering and injury upon victims victims than thana a local local loan loanshark shark can. can. Instead of breaking bones and this new new breed of crooks breaks dreams, dreams,lives, lives,livelihoods livelihoods and and famifamiInstead of breaking bones and knees, knees, this breed of crooks breaks lies. lies. They They illegally illegally take take away away their victimkhomes, victim’s homes, ruin ruintheir theircredit, credit,destroy destroytheir theirfamilies families and and damage damage their businesses. Often, the scars lef by these criminals last years and even a lifetime that takes longer to heal than than a businesses. Often, the scars left by these criminals last years and even a lifetime that takes longer to heal a broken bone. broken bone.
AMERICA'S NEWNEW "WHITE-COLLAR MAFIA" AMERICA’S “WHITE-COLLAR MAFIA”
Members of this this new new“white (white collar collarMafia” Mafalare Members of are
distinguish for rather hard to distinguish forthey theydonTJlook don’t look like the guys in Goodfellas, Goodfellas, the the Godfather Godfather or or any any of of the the ururguys in
ban street gangs you you have have seen seenon ontelevision. television. They’re ban street gangs TheyTrk not even from Italy, Latin America not even from Italy, Latin Americaor orthe theFar FarEast. East. These unassuming men men and andwomen women live live in in modmodThese unassuming est to upscale neighborhoods and are attired in Ann est to upscale neighborhoods and are attired in Ann Taylor, Brook Brothers Brothers or or Armani Armani suits. suits. They Taylor, Brook They can can even be be the the new new next next door neighbor or even or the the person person sitting next to you in your church or synagogue. sitting next to you in your church or synagogue. They earn earn from fom $35,000 $20 million $35,000 to over over $20 yearin in their their new career. career. They They are are titled titled dollars per year loan and “foreclosure (?breclosure specialistsUat a loan collectors collectors and specialists” at a mortmortgage servicerto tothe theCEO CEO and and chairman chairman of a Fortune Fortune gage servicer 500 company or Wall Street investment bank. 500 company or Wall Street investment bank. They drugs,supply supplyarms, arms,run run numnumThey donTtJdeal don’t deal drugs, bers, fix fix horse racesor or take take money money for for protection. bers, horse races protection. Yet, they have haveaa worldwidedistribution distribution network network in Yet, they worldwide the hundreds hundreds of of billions billions of the of dollars. dollars. Each Each day day they they go go to work with the goal of devising new complex fwork with the goal of devising new complex financial derivative derivative products, products, accounting accounting methods, methods, that stay stay one one step step away away from from models, and and schemes schemes that the regulators regulators and one one foot foot ahead ahead of of the the law. law. You may be be familiar familiar with with the other You may theterm termCasing “using other peoplelSJmoney.U It became popular in the late people’s money.” It became popular in the late 80s 80s when scamartists artistssold soldmillions millions of of get get rich rich when real real estate estate scam quick kits kits showing showing how how to tobuy buyand andsell sellreal realestate estate with with little littleor orno nomoney money down. down. toto increase Now, in inan aneffort effort increasepersonal personalsalaries salaries and bonuses and corporate earnings, profts, returns and bonuses and corporate earnings, profits, returns on investment and stockholder dividends they prey upon the educated and and less lessfortunate fortunateAmericans. Americans upon theleast least educated
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They use of “predatory (?redatory use any one of the dozens dozens of lendinglpractices lending” practiceswhich whichwe weare are too too accustomed accustomed to seeingand and hearing hearing each eachday. day. Predatory Predatory Lending Lending is seeing currently the the focus focus of ofdozens dozens of of Federal Federal and and State State investigations by regulatory and legal agencies. The investigations by regulatory and legal agencies. The and city city U.S. Congress Congress and many state state legislatures legislatures and
councils are are considering laws laws and ordinances to prevent 5 vent its its spread. spread. According Accordingto torecent recentreports, reports,over over3 35
Statesare arecracking crackingdown down on predatory States predatory lending. lending. Predatory lending bills Predatory bills introduced introduced in instate state legislalegislahavealready alreadyfulfilled fulfilled predictions predictions of becoming tures have the yearlSJhot the year’s hot issue. issue. Congresshas has its ownnational nationalbill. bill. Rep Congress its own Rep John John LaFalce, D-N.Y, the ranking ranking minority minority member LaFalce, D-N.Y., member of the House Banking & Financial Services Committhe House Banking & Financial Services Committee, says says“Consumers CY; onsumers withflawed flawedcredit credit histories histories are tee, with are in being preyed uponby byfinancial fnancial instiin some some cases cases being preyed upon tutions that that offer offer more more than than they they deliver. deliver. IIbelieve believe the committee could could beneft benefitfrom fromaacomprehensive comprehensive hearing devoted to the issue.U hearing devoted to the issue.” Many Many of ofthe theproposed proposed state predatory lending found under bills lower lower thresholds thresholds found under federal federal regularegulareducesthe theability ability of of tions. MinnesotalSJbill Minnesota’s bill reduces points and and it it mortgage lenders to charge charge points and fees fees and virtually eliminates balloon payments. virtually eliminates balloon payments. presidentof of the the Illinois Illinois Mortgage Brian Israel, Israel, president concern that that predaBankers Association, expressed expressed concern predatory lenders giving all tory lenders are, in the the eyes eyes of legislators, legislators, giving subprime lenders 4redatory lending subprime lenders a a black blackeye. eye. “Predatory lending is is not synonymous with subprime lending,t This has not synonymous with subprime lending,” This has primary QnantraUof become the primary “mantra” ofbanks banksand andservicers servicers who finding it who are are finding it hard hard to to justify justify an an 18% 18% mortgage mortgage 80 year year old old woman woman with sold to an 80 withlittle littleor orpoor poorcredit, credit, but 80% 80% to to 100% 100%equity equityin inher her home. home.
WHITE-COLLAR MAFIAMAFIA LOAN SHARKING WHITE-COLLAR LOAN SHARKING
Members of this this new new“white (white collar collarMafia” Mafalare Members of are
distinguish for rather hard to distinguish forthey theydonTJlook don’t look like the guys in Goodfellas, Goodfellas, the the Godfather Godfather or or any any of of the the ururguys in
ban street gangs you you have have seen seenon ontelevision. television. They’re ban street gangs TheyTrk not even from Italy, Latin America not even from Italy, Latin Americaor orthe theFar FarEast. East. These unassuming men men and andwomen women live live in in modmodThese unassuming est to upscale neighborhoods and are attired in Ann est to upscale neighborhoods and are attired in Ann Taylor, Brook Brothers Brothers or or Armani Armani suits. suits. They Taylor, Brook They can can even be be the the new new next next door neighbor or even or the the person person sitting next to you in your church or synagogue. sitting next to you in your church or synagogue. They earn earn from fom $35,000 $20 million $35,000 to over over $20 yearin in their their new career. career. They They are are titled titled dollars per year loan specialistsUat loan collectors collectors and and (?breclosure “foreclosure specialists” at a a mortmortgage servicerto tothe theCEO CEO and and chairman chairman of a Fortune Fortune gage servicer 500 company or Wall Street investment bank. 500 company or Wall Street investment bank. They drugs,supply supplyarms, arms,run run numnumThey donTtJdeal don’t deal drugs, bers, fix fix horse racesor or take take money money for for protection. bers, horse races protection. Yet, they have haveaa worldwidedistribution distribution network network in Yet, they worldwide billions of the hundreds of billions of dollars. dollars. Each day they go to work with the Each day they go to work with thegoal goal of of devisdevising ing new new complex complex fnancial financialderivative derivative products, products, acaccounting methods, methods, models, models, and and schemes schemes that stay stay one step step away awayfrom from the the regulators regulators and and one one foot foot ahead one ahead law of the law. You may be be familiar familiar with with the other You may theterm termCasing “using other peoplelsJmoney.U It became becamepopular popular in in the people’s money.” It the late late 80s 80s when real estate scam artists sold millions of get rich when real estate scam artists sold millions of get rich quick kits kits showing showing how how to tobuy buyand andsell sellreal realestate estate with with little little or or no no money down. Now, Now, in in an an effort to increase personal salaries and bonuses and increase personal salaries and bonuses and corporate corporate earnings, profits, profts, returns on earnings, on investment investment and and stockstockholder dividends holder dividends they theyprey prey upon uponthe theleast least educated, educated, fortunate and fortunate and complacent complacent Americans. Americans. They any one oneof of the the dozens dozens of“predatory (redatory They use use any of lendinglpractices which we are too accustomed to lending” practices which we are too accustomed to seeing and and hearing hearing each seeing each day. day.
Lending is currently the Predatory Lending is currently the focus focus of dozens of Federal and State investigations byregulatory regulatory ens of Federal and State investigations by
agencies. The U.S. and legal legal agencies. U.S. Congress Congress and many state legislatures legislaturesand andcity city councils councils are are considering considering laws state laws and ordinances to prevent its spread. According to and ordinances to prevent its spread. According to arecracking crackingdown down on recent reports, over over 35 States States are predatory lending. Predatory lending bills introduced predatory lending. Predatory lending bills introduced in legislatureshave have already fulflled predictions predictions in state state legislatures already fulfilled of becoming of becomingthe theyearlsJhot year’s hotissue. issue. Congress has its own nationalbill. bill. Rep Congress has its own national Rep John John LaFalce, D-N.Y, the ranking ranking minority minority member LaFalce, D-N.Y., member of & Financial Committhe House House Banking & Financial Services Services Commitsays ( onsumers with tee, says “Consumers withflawed flawedcredit credithistories histories are are in being preyed uponby byfinancial fnancial instiin some some cases cases being preyed upon tutions that offer more than they deliver. that offer more than they deliver. IIbelieve believe the committee could beneft benefitfrom fromaacomprehensive comprehensive hearing devoted devoted to the the issue.U issue.” Many Many of of the theproposed proposed state state predatory lending bills lower lower thresholds thresholds found found under bills under federal federal regulations. regulations. MinnesotalSJbill reduces the ability of mortgage mortgage lendMinnesota’s bill reduces the ability of lenders to to charge chargepoints points and and fees feesand andititvirtually virtually elimiers nates balloon payments. nates balloon payments. presidentof of the the Illinois Illinois Mortgage Brian Israel, Israel, president Mortgage concern that that predaBankers Association, expressed expressed concern predatory lenders are, in the eyes of legislators, giving all tory lenders are, in the eyes of legislators, giving all lenders a ablack blackeye. eye. 4redatory lending is subprime lenders “Predatory lending,U not synonymous synonymous with subprime subprime lending,” This becomethe the primary“mantra” ( antraUof This has has become primary of banks servicers who are fndingit it hard hard to and mortgage mortgage servicers who are finding justify an an 18% 18% mortgage mortgage sold an 80 80 year year old justify sold to an woman with with little little or or poor credit, but 80% to 100% equity in in her her home. home.
abuses. But. perjury perjury and wide-scale witness tampering tampering by these thesefirms.servicers that have become toxic waste dumps gage gage servicers that have become toxic waste dumps for companies companies looking to to CdumpTpredatory “dump” predatory loans loans loansthat thatwere wereknowingly knowingly made by by fraudufrauduand even loans lent lent and and deceptive deceptive means. legal legalopinions. dumps. defne. Document hosted at http://www. schemes schemes as well well as asaa plan tofight fightit. in in and Our collective collective work. and to contribute contribute to. Governdifficult totrail. Washas Lehman Brothers. gray outright fraud and perjury to mislead and defraud outright fraud and perjury to mislead and defraud consumersand andcourts courts across across America. is right.substantiate substantiate and Government agencies and even evenSenator Senator Graham. their compliance offcers prime lenders. The uses The white-collar white-collarcriminal criminal uses a a variety variety of of techtechnological advances. banks or or mortgage mortgage companies. personal But in O scores But inreality. recommendations. gray shaded shaded legal legalopinions opinions and and nological advances. industryhas has created a number of (special servicersUwho are created a number of “special servicers” who are mortmort.com 0 . suggestions. These toxic toxic waste wastedumps. Israel Israel is Notall allsubprime subprime lending lending is is predatory lending. comments. lawyers. uses. This This predatory predatorymortgage mortgageabuse abuse has has been going for many largelyundetected undetectedand andintentionintentionon for many years years largely by the the culprits. suggestions. politicians. including regulators. leaders. opinions. has this abuse come to the national spotlight! Yet. forms. it. crime. system. regulators.and concerns one another. i firms andvendors vendors look look for for ways ways to to prey prey upon upon vicvicfrms and tims. St. Your comments. and out of of this this report report will will ultimately ultimately stop stop this this new new breed breed of white-collar white-collar victimization of criminals and their victimization ofthe the elderly. the the vast vast majority Using the collective brain trusts. culprits. lenders. structure and and organization leaders.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 This network network of Qollection “collection and and foreclosure) foreclosure” irms been acrossAmerica America firms haverecently recently beensued suedin incases cases across f have wide-scalefraud. justice. subprime. CitiGroup. Stearns. politicians. facts. work.Chairman Chairman ment agencies and Graham. evaluated. companies. Washington all been beenguilty guilty of of ington Mutual Mutualand andBank BankOne Onehave have all predatory lending practices. definitions. everyone.in in cooperation cooperation with with a network of network of unscrupulous unscrupulouslawyers lawyers who who are are part of an an organizations called the USFN [they hide their real organizations called the USFN [they hide their real which is Network] name which is United UnitedStates States Foreclosure Foreclosure Network] have become becomevirtual virtual computerized computerized criminal enterhave enterprises that would make the real mob envious. predatory lending practices. Atlanta. their compliance officers and and attorattorneyscommunicate communicate their their policies. It Itwill will alsoillustrate illustrate its forms. Not Mr. additions. The attempt to justify The MBA MBAand and its its members members attempt promulgating the subprime lending by promulgating the argument that they are are doing minorities. schemes. their and witness their lawyers lawyers and clients have been identifed.firms frms ally shielded by and their lawyers. Nye Lavalle . and clients have been identified.is isthe theage age old old use use of of FIC FICO scores credit ratings method to in and credit ratings the the best best or fairest method to use use in Cdlualifyingand andapproving” approvingTi loan. majority is! is! Using predatory lending. the lenders. poor and disadvantaged aswell as the American Dream itself! itself and disadvantaged as well as the American Dream Anyone wishing to contact the author of this report to offer data. the the poor poor and and disadvandisadvana great greatservice service inproviding providing loans loans to to Americans Americans taged a in who wouldnUnormally qualify for a mortgage wouldn’t normally qualify for a mortgage or personal loan.probneys prob. seminars. recently.Wall WallSt. loan.its itspractices. elderly. bankers. derstand This This report report will will defne define what what predatory predatory lending lending is. frms. USFN other conferences and chat chatrooms.President Americans Abuse TM AmericansAgainst AgainstMortgage Mortgage Abuse™ 3491 Buckhead Loop #1605. we weneed needto to better better ununsays derstand and and define define what what predatory predatory lending lending is is first. means. additions. report. USFN the collective brain trusts. But.WHITE-COLLAR MAFIAMAFIA AT WORKAT WORK WHITE-COLLAR Mr. Some small banks Some of the largest banks and andWall Wall Street Streetinvestment investmentfirms frms such largest banks such asBear BearStearns. right. and legal legal authorities lenders. The defnitions. consumer advocates. advice. They Theymanipulate manipulatethe the nonjudicial nonjudicialforeclosure foreclosure process and a a legal legal system systemthat that is is in in the process and the dark darkages ages when it comes to getting a grip on this water-collar when it comes to getting a grip on this water-collar fraudulent crime. fraud. trail. practices. policies. despite the on predatory predatory lending. advocates. information or any input that will assist in updates of this report. structure organization and and have have been been diffcult to and define. also its forms. but future edieditions of this report. as plan to The facts. Predatory lending is is not not limited to Predatory lending to subprime. uses. seminars. it. reality. SenateBanking BankingCommittee Committee himself himself of the powerful Senate saysthat that before beforewe weregulate regulateit. bankers. has this abuse come to closures and media attention. afer aftera arash rash of of foreforeclosures and media attention. The The industry “qualifying a loan. lems lems and concerns to one another.suggestions. rooms. They have learned learned to to pillage pillage and by illegal illegal use of the the have and steal steal by use of legal legal system. subprime subprime lenders. is. MBA. abuses.com/post/documentViewer. CitiGroup. illustrations and information information contained contained herein herein are are designed to to be be a a work work in designed in progress progress for everyone. Only Onlyrecently. Their Their law consumers America. They prises that would make the real mob envious. Lehman Brothers.schemes. please call or write: Mr. lending. MBA. the recent recentfocus focusand andattention attention placed Yet.jdsupra. frst. to. GA 30326 404/844-4000 email@example.com obstruction of of justice. subprime subprime and and other conferences and prime lenders. stories stories warmly welcomed welcomed and and will will and recommendations are warmly but included included in future not only only be be evaluated.
Remember when you saw ads that instructed you Remember when you saw ads that instructed you to save some traveler’s travelerlsJchecks in yournight night stand or to save some checks in your drawer for a rainy day? that desk drawer a rainy day? Banks Banks didnTtJmake didn’t make that % transaction much money money from from the the11% transaction fee fee they chargedyou. and say. date. money account. We Many of of us us do the same same thing. When Whenwas was the the last last time you or someone you knew used a traveleriJcheck for a busisomeone you knew used a traveler’s check for a businessor or personal personalvacation? vacation? When When was the last last time time ness was the you saw comyou saw one one of of those those famous famoustravelerlsJchecks traveler’s checks commercials? ItTsJbeen awhile hasn’t it? mercials? It’s been awhile hasnUit? Document hosted at http://www. Welke We’ve seen seen major Congressional Congressional action and and HUD hearings of HUD hearings on onmortgage mortgage abuses. In 25 25years years banks banks have have weaned humans. we we earn earn more or mutual fund. you. CFO. Many thing. income income and other money to to generate generate interest. see. That’s ThatiJthe simpletruth. lending. they all do. with a 15 day grace peperiod for payments. needless to say your stock ings of your company. which whichof ofthese thesepractices practices actually actually involve predatory lending? lending? The stark reality volve predatory reality is that they all do. but each underlying document supporting supporting what whatthe theaccount account statements statements say. do you remember the days [about 25 years when banks bankspaid paidyou youor oroffered ofered promotions promotions to ago] when get use an anATM ATM machine? ATM machines get you to use machine? ATM machines were far more costly of were far costly then [remember the costs costs of calculators and and PCs PCs when when they they first first came came out] out] and calculators and banks had human beings who gave you your money. Predatory lending lending is isnot not limited limited to one one form form or Predatory another of abuse. the more money they they earn. examine. increased increased collection automation.com/post/documentViewer. it.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 You see. In cases. savings. needless to say. but each underlying only your account statements. money. But. the Before it gets gets out the more more they they can can manipulate the the “cash dash flow” Howland manipulate and investment investment of that interest.WHY PREDATORY LENDING EXISTS WHY PREDATORY LENDING EXISTS A lot been written written about predatory lending lot has has been lately. However. Variousstates states investigating rent-to-own rent-to-own contracts. reason. with a 15 day grace profits or earnings a bank. our bank bank account or Think in and and out? out? A A Think if ifyou you had had billions to pay pay in few delayed delayed days days here and a a few days days there can generate a a significant signifcant increase in the the profits profts and erate increase in and earnearnings of your company. collect. rereduced their teller force and employee costs. the more turns through complex financial schemes. But. delay the processof ofpayments paymentsreceived? received?Anyone Anyonewatching watching the process major investigative would cermajor investigative news news programs today would certainly know know that that this this is is occurring occurring at at banks.you youmay maybe beaavictim victim of of predatory predatory lending lending and know it. Think Think of charged of all all the millions they had to repay in lost travelerkchecks? repay in lost traveler’s checks? You Yousee. way.payday payday loans loans tacticsof ofvarious andfinance fnance comand the tactics various credit card and panies.00 at at some ATMs ATMs to ourown own money? money? More some to access access our More fee fee income income you yousuppose? suppose? ThatisJone good reason. in the the range range of $25 billion annually. to lars check market market that that is is now lost lars in the the travelerk traveler’s check lost when half way around the the world world and when you you go go half way around and enter enter a a PIN number money from simple PIN numberto toget get money from your your account. let let me tell That’s one good you about about another. duced their teller force and employee costs. For you you older older Americans [baby-boomers and For Americans [baby-boomers and bebeyond]. banks. It exists on a massive scale in mortgagelending. where where banks. account. Did as Did you you ever ever think that that in in order order to to boost boost profits or earnings a bank. what does does this have to to do with have with predatory predatory lending? lending? Well Wellyou yousee. Inmany many gage and finance companies across America. other rereturns through complex financial schemes. best profits fee revenue. That more money money in able That way. not even know 0 . banks had human beings who gave you your money. In weanedus usoff of humans. your stock options and if you’re youTr? the CEO or or CFO. mortgage and finance companies across America. do you remember the days [about 25 years yond]. banks. see. We pay on the last date or or pay pay at at the the bank bank our our loan loan on last date on the the last last availavailable due due date. and and made billions billions of of profits profts from why do do made fromthe thesavings. panies. you may be asking asking yourself. options and bonuses bonuses if the CEO So. Various biles after first legalizing the abuse. collection and and transfer transfer of money. The State State of down on on “title” OtleUloans Florida cracked cracked down loans on automoautomobiles after frst legalizing the abuse. well. Estimates fee Estimates today put put various various bank bank fees fees in billion annually. really make make their mortgage and finance companies companies really investment of the money is is in the the management management and investment money they obtain obtain or or collect.jdsupra. Why to their their Whydo dobig bigcorporations corporationsdelay delay payments to smaller vendors? How about insurance companies smaller vendors? How about insurance companies delaying payment of your claims for an accident or doctorkbill? you think its because doctor’s bill? Do Do you think its because they they donU don’t havethe themoney moneyto topay payyou? you?Of Of course coursenot! not! It’s ItiJ have becauseeach each additional day day and and night night they keep because additional they can can keep millions or even billions or tens of billions in even billions tens of billions in their earnmore moremoney moneyusing usingyour yourmoney. are investigating contracts. unless you you carefully carefully examine. So So why you suppose we pay from a dollar to over $4. It exists on a massive scale in not not another of abuse. lately.the thecompany’s companylSJbest profitsare areearned earnedfrom from late late cases. abuses. However. We money the simple We all know it. yourself what So.00 you suppose we pay from a dollar to over $4. theyT they’lllearn out of of their account. earn. revenue.but but in in A lending only subprime mortgage as well. truth.the thebanks banksused used tomake makebillions billions of of doldolYou see. another. would would intentionally intentionally delay the riod for late late payments. audit audit and and reconcile reconcile not not unless only your account statements.
00 transaction come out of your your acaccount on the first day of the month and your bank bounces your your check checkon onthe thefourth fourth day? day? In In this bounces this day day of Federal Federal Express.00 nied? Did charge? Was Wasit itworth worth the time time and aggravation? aggravation? Or Or charge? did you only fght and call them over that $200 or fight and call them over to pay? pay? How How about $2000 claim they didnTtJwant didn’t want to that $25. However. ance Don’t know. right? How about about this this one? you match match up up your your one? Do you credit card and ATM receipts with each and every credit card and ATM receipts with each and every transaction on your monthly transaction monthlystatement statement to to see see if its correct? How How many correct? many Americans Americans do you think think even even balancetheir their checkbook checkbookmonthly? monthly? Do balance Do you? you? Do you if you’re youTr a lawyer. mutual fund Why. car or personal loan you ever had when each home. electronic transand age age of deposits does doesit it really take take four four days fers and deposits days to get get from one one block in New New York York City to to another another block less than a a mile mile away? less than away? you are areprobably probably [I6 hopeful] By now you [I’m hopeful] getting getting it? Are my point! But. judges. answer. out there defending clients And. frauds. second. or lie. third.think think If you you think thinkIE I’m again! Each few. dramatic. disadvantaged disadvantaged Document hosted at http://www. all all you you lawyers lawyers out from what think to wrongful foreclofrom what they they or you think to be be wrongful foreclosures? Do Do you have have the the right right documents? documents? Are the sures? real? Does documents the the other other side side produced real? Does the bank or mortgage servicer youTrL suing or bank or mortgage servicer you’re suing or that’s forethatlsJforeclosing on your clientlJ closing client’s home even even own the note theyTTL foreclosing or collecting on? they’re foreclosing or collecting on? If h being silly and and dramatic. phone. according according to your mutual fundstatement. How Howyou youask? ask? Simply ask Simply ask yourselves yourselves these these simple simple questions.WHY PREDATORY LENDING EXISTS WHY PREDATORY LENDING EXISTS or a a minority. one. the Qhou“thousandsTTof abuses and many dozens of predatory lendsands” of abuses and many dozens of predatory lending and frauds.00 returned returned check check fee fee your your bank bank charged charged ®ouncingTa you for for supposedly supposedly “bouncing” a check check on on your your acacYou donTtJhave be poor. I in ten and ing schemes schemes and I have have seen seen in ten years years and over 8000 8000 hours hours of of investigating investigatingfraudulent fraudulent and andfifover nancial crimes. haveyou youlooked? looked? Do Do you know how closely closely have you even even know what reallylooking looking for for or or are are supposed supposedto tolook look whatyouTrL you’re really for in in the the frst firstplace? place? Do Doyear-end year-end and and beginningbeginningyear balances in subsequent loan history year balances in subsequent loan history statements statements match? How about How about life-to-date life-to-date and and year-to-date year-to-date interest? Do Do they match up in est? in the the frst firstyear year of ofthe the loan? loan? How about about the third. means. elderly You don’t have toto be poor. middle class and even wealthy Americans middle class and even wealthy Americans are are vicvictims. of the again! Each of of these these are are just a few.fourth fourthor oreven even ffh year of the loan? Do they match? Should they match? year of the loan? Do they match? Should they match? Of course yearlSJlife-toOf course not. They Theyare arejust justpreyed preyed on on harder harder and and for larger they don’t donTJhave theknowlknowlfor larger dollars dollars because because they have the edge or or resources resourcesto tofight fight back back as as hard. car or personal loan you ever had when paying off of or or refnancing refinancinga a loan? loan? How Howmany many people people yesto to that that question? question? I I got do you you think thinkhave have said said yes got you on that that one. And. crimes. scam.00 $25. that you you amagnifying magnifying glass to read. questions. Did you Did you audit.jdsupra. judges. statement. what all the small type on the back page of thatpromwhat all the small type on the back page of that promissory really means? means?How How issory or loan note you signed signed really about that really really small newsprint booklet. fifth the second. elderly.com/post/documentViewer. diferent banks different banksand andmortgage mortgagecompanies companiescanUagree can’t agree on what what each each term termand andclause clause means. Express. juries. audit. even even if a lawyer.reconcile reconcile or orcarefully carefully examine examine the payof figure of closing payoff figureor oramount amount of closingcosts costsand and fees fees for each home. But.00 $20. . did that $2000. not notan anexcuse excuse or lie. read. not. ATMs.00 $30. juries.what whatare are you you doing about about it? Are you changing changing your your habits? habits? If IfyouTrL you’re a regulator or investigator getting an unusual amount of complaints complaints investigator getting an unusual amount of about a mortgage company or or a a credit credit card card scam. well then then ask ask and you get aareal dig and and dig dig until until you get realanswer.00 transaction come out of did that $2000.00 or or $30. Have you had a acharge chargeon onyour yourphone. so so how how come come the the fifh fifth year’s life-todate info info exactly baldate exactlymatches matchesthat thatyearlSJyear-to-date year’s year-to-date balance reconciliation? reconciliation? DonTJknow.ATMs. edge However. really.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 youhad hadfunds funds that that were wereon on hold hold for count because because you i DidnUyou from your five days? Didn’t you make make that payment from fve days? mutual fund fund into intoyour yourchecking checking account Why. hard.that thatcame camewith with your your need a glass to last credit card cardstatement? statement?Did Did you you know know your inlast credit terestrate ratewent wentup upfrom from 18% 18% to to 28% when terest when that that new bank took tookover? over? Even Evenlawyers. credit credit Have you ever ever had card or store charge bill ever be wrong? How many card or store charge bill ever be wrong? How many times have a charge charge that that shouldnTJbe there times have you you seen seen a shouldn’t be there appear than one they missed? How about your appear than one they missed? How about your local local grocery grocery or department store? store? Have Have their theirscanners scanners madea amistake mistakein inwhat whatthey theycharged chargedyou? you?How How ever made often do do you you think thinkthe themistakes mistakes are are in your your favor favor and they and theycharge charge you youless? less? Ever had had an an auto auto or or medical medical insurance insurance claim claim deEver denied? Did you you fght fightover overthat that$20. lawyers. understand understand Do youreally.
poor. our brothers. Cost vs.000 $18. Document hosted at http://www. brothers. mortgage mortgage servicers servicers and finance finance companiesutilize: companies utilize: • • • • • • • • • Amount complaint. are predatory lendingschemes schemes and scams. ItISJust It’s just easier easier for educated and and wealthier wealthier Americans Americansto to catch. we are all prey eventually! old – hopefully! As such. car. arenTtJ Banks.000. cost to fix. if you uct or safe you or Igo any I gointo into anybank bankand andeven evenmake makea a joke joke about about stealstealing ing money.00? years take for them them to toaccumulate accumulate an an yearswould would it it take when payments payments were were only $18. They disadvantaged and minorities are affected. vs. cost to fx. mothers. independence. Your as elderly persons or non-English speaking alien or an an elderly persons or non-English speaking alien or American. donTtJfool yourself intothinking thinking only don’t fool yourself into only elderly.000. just justharder harder to toget. doesnTtJmatter. fathers. banks.000off of on how the the mortgage mortgage company on a a letter or or payoff payof on a a $104. catch.com/post/documentViewer. Cost of of litigation litigation vs. banks. but but pawn shops shops to the largest does prey. sister. well. thoseof of you you unfamiliar unfamiliar with with the 80/20 rule. inclination. get. parents and friends friends are areprey prey too.00 arrearage arrearage when $800. factory. inclination. Higher Higher parents and too. or or any any one one of of us us actually actually robs robs a bank or goes to a store and steals a C D or banana and we we get get goes to a store and steals a CD or banana and a day day or or few hours caught. law. it For those saysthat that80% 80%of ofyour yourincome incomewill will come come from from 20% says of your customers.WHY PREDATORY LENDING EXISTS WHY PREDATORY LENDING EXISTS We now know know that thatwhat whatthese these crimes crimes involve predatory lending scams. While I may come from the Bill Marhar school ment. Many Many of of their their findings fndings are ses. How many to How manyFords Fordsand andFirestones Firestones do we we need to have before action is taken? Do ten. mortgage and finance finance companies companiesnot not only only Banks. rep. for more American. scamshave have been aroundmuch muchlonger longer than than the these scams been around term predatory predatory lending.Yet. catch it have the time. They consumer research dumb. Banks. #of # ofservice service reps reps per per customers. mortgage and fnd.but buttoday. today. Lawmakers and the public often forget this. They are are only carefully and demographically demographically targeted. Yt. Theyconduct conduct consumer research studies studies and focus groups then develop develop models models and and schematics schematics that deal with various cost and expense/beneft analythat deal with various cost and expense/benefit analyses. expense noncompliance.00 accountants and experts company was was$18. sister. prodsafein injail jailfor forviolating violatingthe thelaw.00 a month? The fact fact is is predatory predatory lending takes takes on many forms and shapes. but in terms of manmake it hard to find. money.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 handful of Here are are just a handful ofexamples examples of of measuremeasurements that that banks. #of who will will write about their their # ofcustomers customers who write not not call call about complaint. expenseand andliability liability of of Cost of of compliance compliance vs. unravel. It It does prey.00 a month? $800. Time allocated to complaints Time allocated to complaints per per hour hour per per serservice vice rep. II do think that think thatcorporations corporationsneed needto tobe be held held accountable accountable as well.00 $104. only carefully selected selected and targeted. Cost of injury vs. it it educated and salaried Americans are victims too. Your money money is is as as good good and and green green as doesn’t matter. 100 or a 1000 people have haveto to die dieor or get gethurt hurt in in order for the company pany to own own up upto toits itsmistakes? mistakes? George George Bush Bush and and many Republicans that individuals individuals should be many Republicans say say that be held with this accountable.00 note note with with demand letter monthly payment $ 800. as So how do So do we we hold hold banks.000.jdsupra. Each of of us is a a target target and and each eachus usof ofus uswill will grow grow Each us is old Ohopefully! As such. disadvantaged and minorities are affected. reality. grandgrandHowever. lending. Lawmakers and the public and collection of paper. do we we not not at at least least spend spend a in fngerprinted? in jail jail and and get get fingerprinted? 0 . practices. It’s the old and business business 101 rule. settlement settlement of of desired desired claim. You YoucanUput can’t puta a factory. It’s practiced from the pawn largest of of banks. 100 or a 1000 have before action is taken? Do ten. Cost of injury vs. While I may come from the Bill Marhar school of political political incorrectness incorrectness and independence. plaint.000. customerwho whowill will follow-up follow-up on # of customer on their complaint. poor. claim. ItlsJthe old marketing and 101 80/20 80/20 rule. are then put into into proceprocedures that that cultivate predatory dures predatory lending lendingpractices. personality and aptitude to do something about it. car. mortgage mortgage and andfinance financecompanies companies aren’t dumb. Amount Amount of of time time on on hold hold per per complainant. customers. butexpensive expensive in and money moneyto to unravel. elderly. if if and educated when they catch it and have the time. II think thinkmost mostof ofus usagree agree with this statestatement. They They know it’s itlJreally hours and really not worth it for your client or you to spend not worth it for your client or you to spend $ 500. we are all prey eventually! However. Amountof ofcost cost per per customer customer complaint. of your customers.00 for accountants expertsto tofind find out out $500. banks. ourfathers. educated and salaried Americans are victims too. In In reality. mothers.00?How How many a monthly payment of roughly $800. mortgage mortgage and and finance finance companies accountable for their misdeeds if we limit companies accountable for their misdeeds if we limit awards to to plaintiffs statutory and punitive punitive damage damage awards limit the or limit theright rightof ofborrowers borrowers to tosue? sue? Is Is the public interest interest best best served served by by such such practices? practices? A A company company is is only only a a company company and and just just a a shell shell and collection of paper. It1 ppracticed from the smallest smallest of of forms and shapes.000.
com/post/documentViewer.computer computerprogrammers programmersand andexecuexecutives who who carried carried out out some some of of this this nation’s nationkbiggest banking.WHY PREDATORY LENDING EXISTS WHY PREDATORY LENDING EXISTS Document hosted at http://www.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 But what and mortgage mortgage companies companies when when they they steal stealmillions. way ofof doing business and each life. when when we welook look at atcombating combating predatory predatorylending.its itsnot not enough enoughto tofight fght a mortgage or or finance fnance So. Until you the corporationlSJbottom-line. well as the companies themselves. a bank.CFOs. We We must mustbe be active active in in exposing exposing Qndividual “individualdecision decisionmakersUas makers” as well as the companies themselves. Until youafect affect the corporation’s bottom-line. areonly only a a“cost Qost of of doing doing business” businesslfor company alone. bankers. They are the ones devising. predatory 0 . millions. approving and carrying out the schemes. ItiJalready nies. lending.jdsupra. hundreds hundreds But what do do we we do do to to banks banks and millions or of millions or even even billions billions from fromus? us? How Howmany manybankers. fees. S&L crimes in jail? tives biggest banking. millions. predatory lending lending will will continue continue to to flourish fourish and multiply. They are the ones devising. CFOs. approving and carrying out the schemes. CEOs.CEOs. S&Land andfnancial financial crimesever everspent spent a a day day in jail? ShouldnUthe who authorized authorized or who Shouldn’t the person person who who knowingly knowinglycarried carried out outaabank bankfraud fraudagainst against customers customers or schemed to steal an elderly womankhome or signed a false affdavit or provided false and perjured testimony in in schemed to steal an elderly woman’s home or signed a false affidavit or provided false and perjured testimony any time time in in jail? a court room room or or to toregulators regulators serve serve any So. way doing business and eachdecision-makerlsJpersonal decision-maker’s personal life. reserved. like like commissions commissions and and legal legal fees. Fines. Fines. mortgage company alone. It’s alreadybeen been allocated allocated and and reserved. are forthese these compacompanies. tens tensof ofmillions.
lawyers and experts. plunder. regulators. should be or has been. time. pundits.To Tocreate create simplifeddefinidefniand each of aa simplified tion. regulators. victimized. attorneys. -”tor-TforPronunciation: ‘pre-d&-”tOr-E. a simple definition ofpredatory predatorylending lendingis is required required with witha a more more detailed focus and illustrating illustrating each of the the various various forms forms and and types typesof ofpredatory predatory lending lending abuses. is. statistical programs and models in the other. defnition of focus placed placedupon upondefining defning Thus. larger.also also :: adapted to to predation adapted Main Main Entry: Entry:preLdayeous pre·da·ceous Variant(s): or pre?iaious /pri-TdA-sh&s/ Variant(s): or pre·da·cious /pri-’dA-sh&s/ Function: adjective Function: adjective Etymology: Latin Etymology: Latinpraedari praedari to to prey prey upon upon (from (frompraeda praeda prey) -aceous ous(as (asin inrapacious rapacious prey) +English + English -aceous or or -ad -acious )— O PREY more at PREY Date: 1713 Date: 1713 1 by preying preying on on other other animals animals :: PREDA1: : living by TORY TORY predacious tendingto to devour devour or despoil 2 usually usually predacious : :tending despoil :: RAPACIOUS . escaped Thus. secrecy. The The examination examination of ofcurrent currentreports. accountants. Function: adjective Function: adjective Date: 1589 1a a :: of. In reality. It years. more than many many have have suspected It provide It is is diffcult difficultto to provideone onestatement statement or or defnition definitionof ofwhat whatpredatory predatorylending lending is.accountants. like Senator Graham have asked for a clearer “definition” QefinitionIofof predatory lending before new laws and regulations are clearer predatory lending before new laws and regulations areconsidered consideredor orenacted. -”tor Function: noun Function: noun Date: 1912 one that that preys. the abuse only becomes publicly visible after afer Unless one of the secret guards provides evidence of the crimes. to. By tens not hundreds hundreds of of thousands thousands have have already By this this time. procedures. much wider. or 1 pillage. the problem of predatory lending is is much wider. Others. profited.DEFINING PREDATORY LENDINGLENDING DEFINING PREDATORY Document hosted at http://www.the thecriminals criminalshave have already already escapedand and profited. larger. makers. destroys. advocates advocates and have offered pretations of what predatory lending is. but nearly impossible their victims.practices practices and and procedures. relating relating to. uncover. Together.com/post/documentViewer. Others. reports. enacted. lending. regulators. like Senator Graham have asked for a pretations of what predatory lending is.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Many and media media representatives representatives have oferedtheir theirown own interinterManylaw lawmakers. abusesor orschemes schemes programmedinto into their their computers computers and and carried carried out out in abuses programmed in their theirpolicies.lawyers lawyers and and regulators regulators to to uncover. or devours 1 preys. they in one hand and sophisticated computers. Unless one of the secret guards provides evidence of the crimes. PREDACEOUS. the abuse only becomes publicly visible tens if not alreadybeen beenvictimized. In reality the problem of predatory lending confounds the public. closed doors criminal priced lawyers lawyers in one hand and sophisticated computers. Behind Behind closed doors and and walls walls of of secrecy. or devours 1 :: one 1 . we should frst examine our trusty WebsterlSJDictionary and look at the defnitions of the term C redation. or or practicing practicing plunder. and methods that not or naked naked eye. or rapine b b : inclined or intended rapine intended to injure or exploit others for personal gain orprofit proft <predatory pricing others for personal gain or <predatory pricing practices> practices> 2 : living living by by predation predation :: PREDACEOUS. -T1or Pronunciation:Tl3re-d& ‘pre-d&-t&r. destroys. we should first examine our trusty Webster’s Dictionary and look at the definitions of the term “predatoryUand to predatory predatory and tory” and all all words words related related to and lending. some definitions: definitions: Courtesy of of WebsterUhere Webster’s here are are some Main Entry: pred·a·to·ry predaoyy= Pronunciation: Tl3re-d& -TifOr-E.pre·da·ceous·ness pre?iayeousjess noun noun pre?iacay -tE/noun pre·dac·i·ty/-Ida.articles articles and and testimony testimony regarding regarding predatory predatory lending lendingonly onlyconfuses confuses and and confounds the public. criminalminds minds arm arm themselves themselveswith with high high priced image seen. Together. should be or has been. abuses.jdsupra. of.thousands thousandsof ofman-hours man-hoursand andmillions millions of of dollars dollars to to detect detect even even one oneof ofthe the many many hundred hundred It can can take take years. policies. eye. imagination. We WecanUuse can’t use the the old definition about it it when we see definition about pornography pornography and and the the frst firstamendment amendment that thatwell we’llknow know when we see it itfor forrarely rarelyis is its its real real image seen. more sophisticated sophisticated and and criminal criminal than suspectedin intheir their wildest wildest imagination. statistical programs and models in the other.-s& /-’da-s&-tE/ noun Main Entry: Main Entry:pred·a·tor predaor Pronunciation: -t& r. pillage. attorneys. regulators. lawyers and experts. they devise devise schemes. their victims. pundits.plans plans and methods thatare are notonly onlyinvisible invisible to to the the public public or but nearly impossible for for schemes.
loan sharking and and shark shark include: Main Main Entry: Entry: loan loan shark shark Function: noun Function: noun Date: 1905 lends money money to to individuals at : one who lends at exorbitant rates of of interest interest rates Main Main Entry: Entry: 2shark 2shark Function: noun Function: noun Main Main Entry: Entry: loan-sharkyng loan-shark·ing -ilh%eki[ng] Pronunciation: -”shär-ki[ng] Function: noun Function: noun Date: 1914 practice of of lending lending money at exorbitant rates of : the practice rates of interest interest Etymology: of German German Etymology: probably probably modification modifcation of scoundrel Schurke scoundrel Date: 1599 rapacious crafty crafty person person who who preys preys upon upon others 1 : a rapacious extortion. lawyers.letlJall let’s all assumethat thateach eachof ofus us accepts accepts that “loan sharkinglis form of sharking” is illegal illegal and and would would constitute constitute a a form of predatory predatory lending lending in in its its most most obvious obvious form. lend·ing lendyng Inflected Form(s): Etymology: MiddleEnglish EnglishIon. However. loan. assume that Oban alone never stand such a a definition. [AE] n loan. So.lend·able /’len-d&-b&l/ adjective lendyr lend·er noun noun lend ble /lien-d&-b&l/adjective Our first of predatory lending could be Our first simple simple defnition definition of predatory lending could beOny “anyloan loanof ofmoney moneythat thatis isdesigned designed or intended to injure or exploit others for fnancial gain or proft. usury. from from l[AE]n 1[AEn loan loan — O more LOAN Date: 12th century LOAN before 12th 12th century Ia Date: before 1 a :: money money lent lent at at interest interest b b :: something something lent lent usuusually for transitive senses transitive senses ally for the theborrowerTsJtemporary borrower’s temporary use use Ia useon oncondition condition that the 1 a :: to to give give for temporary use sameor or its its equivalent equivalentbe bereturned returnedbb: : to to let let out same condition of (money) for temporary temporary use use on condition of repayrepayment with with interest interest intransitive to make make a a loan loan intransitivesenses senses : :to usage see see LOAN usage LOAN .jdsupra.ULet’s LetlJnow examine the “lending.from from Old Old Etymology: MiddleEnglish Englishlenen.” now examine the term *edatory.” term Qending. let let alone the the lenders. judges when I I see see it with suchaabroad broaddefnition.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 We just read a few few definitions definitions of the word read a word C “predatory. WebsterlsJdefinition of loan loan shark. lawyers."LENDING DEFINITIONS" “LENDING DEFINITIONS” Document hosted at http://www. definition. akin to to Old OldEnglish English1l[AE]n linquere to leave. extortion. judgesand andregulators. So. lAn. lenen.U Main Entry: Entry: lend lend Main Entry: Entry: loan loan Main Main Pronunciation: Bend Pronunciation: ‘lend Pronunciation: ‘lOn Pronunciation: Mn Function: verb Function: verb Function: noun Function: noun Etymology: Middle from Old Form(s): lent lent /’lent/. /pent/.” We could then let juries and judges use that I’ll when it definition defnition with such However. regulators. or trickery through usury.U We could then let juries and judges use that It know know it it to injure or exploit others for financial gain or profit. lawmakers. Main shark Main Entry: Entry:3 3shark Date: 1602 transitive senses transitive senses archaic :: to to gather hastily 1 archaic to obtain obtain by 2 archaic archaic :: to by some some irregular irregular means means intransitive intransitivesenses senses I archaic : to practice fraud fraud or or trickery trickery 1 archaic practice archaic::SNEAK SNEAK 2 archaic 77 . lon. loan sharking include: Webster’s definition of shark. Greek leipein English more at at linquere to leave. Greek leipein English l[AE]nan. Latin Latin Etymology: Middle lenden. from OldNorse Norse lAn. lEon lEonto tolend. lenden. l[AE]nan. lend.com/post/documentViewer. lenders. would would never stand for for such definition. lawmakers.
but butare arenot notlimited limited to books.” WeTe come a along longway waynow nowtoward towarddefining defining predatory predatory lending. but not limited to violations of RESPA. HOEPA. Fair Credit Act. These Theselaws lawsinclude.U extortion. HOEPA. or lends money to individuals at exorbitant rates of rates of Acts. Fair Debt Collection Act and various State Unfair & Deceptive Trade Practices and various State Unfair & Deceptive Trade Practices Acts. bribery perjury extortion etc. theft. trickery or criminal act. usury. usury. We’ve come However. Federal Truth Truth In Lending. regulation or act including. HOEPA. Fair Debt Collection Act Act and and various State Unfair Unfair & various State &Deceptive DeceptiveTrade TradePractices Practices Acts. Fair Debt Collection Act Fair Credit Act. theft deception. or lends money to individuals at exorbitant interest.” We now have but is is it enough? Let1sJall agree have a working model model for for aadefnition. Fair Housing Act. Fair Credit Act.REFINING THETHE DEFINITION OF PREDATORY LENDING REFINING DEFINITION OF PREDATORY LENDING Document hosted at http://www. Fair Housing Act. wedonTtJneed don’t need to complicate the the definition defnition by complicate by including includingevery every criminal criminal act act known known to to man. “criminal” acts including. Federal In Lending. extortion. intended intended or does “any loan money that is designed. to violations of RESPA.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Our simple can be expanded Our simple defnition definition can be expandedto tosay say that that predatory predatory lending lendingis is Qny “anyloan loanof ofmoney moneythat thatis isdesigned designed others for for financial fnancial gain proft that usury or intended to injure or exploit others gain or profit thatpreys preys upon upon others others through fraud." interest. trickery or criminal act or lends money to individuals at exorery or criminal act or lends money to individuals at exorbitant rates of interest. or does injure oror exploit others for financial gain or profit that injure exploit others for financial gain or profit that preys upon others through fraud. but it enough? Let’s all agreeand andassume assume that all all (riminalIacts including. usury.U All we that they they are areenforced. Fair Debt Collection RESPA. We should and must include violations (known and violations of of these these “known and acceptablelacts acceptable” acts by by expanding expanding predatory lending lending to to mean: mean: "any loan of of money that is designed.should should be be included. or violates one or more provisions of ery or criminal act. perjury. extortion. Fair Housing Act. enforced. extortion.jdsupra. or trickery or lends money to individuals at exorbitant rates of interest. extortion. Fair Credit Act. However. trickpreys upon others through fraud. trickpreys upon others through fraud. regulation or act including. but not limited any state law. or does injure or exploit others for financial gain or profit that injure or exploit others for financial gain or profit that preys upon others through fraud. Fair Housing Act. now. Acts. extortion etc. of various crimes. Many say regulations“on ®n the Many in ingovernment government and and in inthe thebanking bankingcommunity community saythat thatwe wehave have enough enough laws laws and regulations the books. or violates one or more provisions of any state law. we included. extortion.” we need need to do do is is make make sure sure that RFSPA. farther. usury. usury. man. bribery. HOEPA. or trickery or lends money to individuals at exorbitant rates of interest. let’s letlsJexpand ourdefinition definition of predatory So now. thef byby deception. but not limited to. expand our predatory lending lendingas: as: "any loan of of money that is designed.” 72 . include. lending. but not limited to. II think thinkwe wecan can still stillgo go farther. intended intended or does “any loan money that is designed. Federal Truth In Lending.com/post/documentViewer." bitant rates of interest. thef. definition. Since Sincewe wealready already have have existing existing laws laws to to provide provide us us defnitions definitions of various crimes. Federal Truth In Lending.
DEFINING "FRAUD" DEFINING “FRAUD” Document hosted at http://www.jdsupra. decepta. I think all of us can agree that fraud is totally unacceptable and needs to be addressedto tocombat combat predatory predatory I think all of us can agree that fraud is totally unacceptable and needs to be addressed lending. duplicite. Lets Letsexamine examineeach. I’d I I like upsand andpolishing polishingof ofthis thisdefinition defnition that satisfied thinkwe we can can do better. from Date: 15th century 1: : contradictory contradictory doubleness of thought. deceite. Main Entry: Entry: de·ceit Main deyeit Pronunciation: di-isEt Pronunciation: di-’sEt from Middle French. or action. is so so precise. : one b :: one one that is that is not not what whatititseems seems or oris is represented represented to be be synonym see see DECEPTION.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 havea apretty prettysimple simpleand and basic defnitionfor forpredatory predatory lending. fraud. feminine of of Function: noun Etymology: Middle Middle English English deceite.IMPOSTURE IMPOSTURE synonym DECEPTION. legal action action 3 : the technically incorrect use of two or more distinct items (as claims. So. I think better. but define well. from French. fraude. let us Yet. complex complex and confusing. deceitful. from from Latin Latindecepta.com/post/documentViewer. Etymology: Middle Middle English English fraude.speech. WebsterlsJfurther explainsfraud fraud using using other words. So. deceitful. but to to defne asas well. speech.or ordefenses) defenses) in in a a single single legal 0 . or action. each. especially especially ::the true intentions by deceptive deceptive words or action words or action 2::the double or or twofold twofold 2 the quality qualityor orstate state of being double 3 : the technically incorrect use of two or more distinct items (as claims. Webster’s further explains words. Yt. from from Latin Latinfraud-. fraus fraus Date: 14th century Ia DECEIT. from from Middle MiddleFrench. duplicitas. fraud-. let usgo goback backto toWebsterlJ Webster’s Dictionary and Dictionary to Dictionary and now now let let us us include include FindlawlJLegal Findlaw’s Legal Dictionary tointerpret interpretvarious various forms forms of of fraud. WebsterlsJdefines fraud as: Webster’s defines fraud as: Main Entry: Entry: fraud fraud Main Pronunciation: 1 od Pronunciation: ‘frod Function: noun Function: noun from Middle Middle French. TRICKERY specifcally: perversion with 1 a : DECEIT. also also: onewho who defrauds defrauds::CHEAT CHEAT b 2 a :: a not pretends toto be : IMPOSTOR. past participle of decipere Date: 14th century act or or practice practiceof ofdeceiving deceiving : DECEPTION 1 : the act : DECEPTION 2: an attempt or device to deceive TRICK 2 : an attempt or device to deceive : : TRICK 3::the deceitful::DECEITFULNESS DECEITFULNESS 3 the quality quality of of being deceitful Main Entry: du·plic·i·ty Main Entry: dujlic)j= Pronunciation:du-’pli-s&-tE du4li-s&-tE also Pronunciation: also dyudyuFunction: Function: noun noun Inflected Form(s): plural -ties Inflected Form(s): plural -ties Middle English duplicitat-. TRICKERY. attentionneeds needs to to be be focused focused on fraud. thebelying belying of of one’s one Jtrue intentions by 1 doubleness of thought. I’m not completely completely satisfed yet. fraud cannot not only bediffcult difficult detect. yet. Iti not Now we we have basic definition lending. French. fraud can only be to to detect. like to to provide provide a a few touch ups can provide a a basis basisfor for future future discussion discussionand andeasier easier interpretation.However. specifically :intentional intentional perversionof of truth truthin inorder orderto toinduce induce another to part with or to surrender surrender a alegal legalright rightb b::an anact actof ofdeceiving deceivingor ormisrepresenting misrepresenting : TRICK something of value or : TRICK aperson personwho whois is notwhat whathe heor orshe she pretends be : IMPOSTOR. from from Late Late Latin duplicitat-. duplicitas. from French. charges. feminine deceptus? past participle of decipere deceptus. from Latin duplex Etymology: Middle English duplicite. more attention precise. charges. Since Since the the art art of predatory lending is can interpretation. However.
mis·lead·er noun misyeadyngl.com/post/documentViewer. evade. akin to Latin sub under) + fugere to flee Omore moreat atUP.secretly secretly (from subter underneath. -lead·ing before 12th 12th century Date: before transitive senses senses : to lead wrong directionor orinto into transitive : to lead inin aa wrong direction mistaken action action or or belief often ofen by a mistaken by deliberate deliberate deceit deceit intransitive senses : to lead astray intransitive senses : to lead astray seeDECEIVE DECEIVE synonym see misyeadyr noun . MISMIShonest child> bb : :DECEPTIVE. Function: noun Function: noun Etymology: Late Latin Latin subterfugium. UP. escape.jdsupra. or or evade ceal.FURTHER DEFINING "FRAUD" FURTHER DEFINING “FRAUD” More definitions of (eaudUn “fraud” inWebsterkincludes: Webster’s includes: Document hosted at http://www.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Main Entry: Entry: subyeryuge sub·ter·fuge Main Pronunciation:‘s&b-t&r-”fyüj 1 & b-t& Pronunciation: r-Ify . escape.evade. from Etymology: Late from Latin Latin subterfugereto to escape.from from subtersubterfugere subter. evade 2 : a deceptive device or stratagem 2 : a deceptive device or stratagem see DECEPTION synonym see DECEPTION Main Entry: trick·ery Main Entry: trickrv Pronunciation: ‘tri-k(&-)rE Pronunciation:i-k(&-)rE Function: noun Function: noun Date: 1800 of crafty crafy underhanded : practice of underhanded ingenuity ingenuity to : the practice deceive or cheat deceive or cheat see DECEPTION synonym see DECEPTION Main Entry: Main Entry: mis·state misyate Pronunciation: “mis-’stAt Pronunciation: (his-iAt Function: transitive Function: transitive verb verb Date: 1650 false account account of of : to state state incorrectly :: give give a a false mis·state·ment /-m&nt/ noun misytatelnent /m&nt/noun Main Entry: de·ceit·ful deyeityul Pronunciation:-f&l -f&l Pronunciation: Function: adjective Function: adjective Date: 15th century : having having a a tendency tendency or or disposition disposition to a :: not not : to deceive: deceive: a honest <a <adeceitful deceitful child> DECEPTIVE. LEADING LEADING synonym see see DISHONEST DISHONEST . subterfugium. [ng] -lE/ adverb mis·lead·ing·ly/-lE-di /-’lE-di[ng]-lE/ adverb 74 . akin to Latin sub under) + (from subter underneath. /-f&-IE/ adverb de·ceit·ful·ness noun deyeityulless noun Main Main Entry: Entry: misyead mis·lead Pronunciation:“mis-’lEd (his-liEd Pronunciation: Function: verb Function: verb -leadyng Inflected mis·led InflectedForm(s): Form(s): mis'd /-’led/.de·ceit·ful·ly /-f&-lE/ adverb deyeityull. FUGITIVE fugere to flee — FUGITIVE Date: 1573 1573 deception by by artifice artifce or 1 : deception or stratagem stratagem in order to conceal. escape.
omission.LEGAL TYPES & DEFINITIONS OF "FRAUD" OF “FRAUD” LEGAL TYPES & DEFINITIONS Document hosted at http://www.com/post/documentViewer. expression. These These definitions and definitions and forms include: include: Latin Latin fraudfraud. abuses.or orconcealment concealmentcal1 a: any any act. act. let us add FindLawkdefniIn determing determing various various forms forms and types types of let us add FindLaw’s definitions of the term and some of its legal forms as well as other important legal terms we can all agree with. regard to contents of an instrument (as a contract or promiscontents of an instrument (as a contract or promissory note) note) sory (called alsofraud fraud in in the the execution) (called also execution) (compare fraud fraud in in the inducement in this (compare this entry) entry) fraud in the inducement fraud in the other other party party : fraud in which whichthe thedeception deception leads leads the to engage in a transaction the nature of which he to engage in a transaction the nature of which or she understands understands she (compare fraud fraud in in the factum in this (compare this entry) entry) crime or or tort tort of of committing committing fraud 2: the crime fraud Example: convicted of of securities securities fraud (see also (see also misrepresentation) misrepresentation) Notes A tort tort action Note: A actionbased based on on fraud fraudis isalso also referred referred to to as as an action an action of of deceit. deceit. the use use of undue influence) influence) (called alsolegal (called also legal fraud) fraud) (compare actual actual fraud fraud in in this this entry) entry) (compare 0 . expression. the the breach breachof ofaafiduciary fiduciaryduty. calculated to deceive another to his or her culated to deceive another to his or her disadvantage disadvantage specif: :aa misrepresentationor orconcealment concealmentwith with refrefspecif misrepresentation erence to some fact material to a transaction that erence to some fact material to a transaction that is is made with knowledge of its falsity or in reckless dismade with knowledge of its falsity or in reckless disregardof ofits its truth truth or falsity falsity and and with with the the intent to regard deceive another and that is reasonably relied on on by by deceive another and that is reasonably relied the other who is is injured thereby thereby b: the the affirmative affirmativedefense defense of of having havingacted acted in inresponse response to a fraud to a fraud equitable fraud (constructive frauds n this in New New : “constructive fraud” in thisentry entry(used (used esp.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 In of fraud and predatory predatory lending lending abuses.jdsupra. actual fraud : fraud committed committed with withthe theactual actual intent intentto todeceive deceive and thereby injure another and thereby injure another (called alsofraud fraud in in fact) ( called also fact) (compare constructive fraud in in this entry) (compare constructive fraud entry) collateral fraud : “extrinsic Ccxtrinsic fraudlin this entry entry : fraud” in this constructive fraud : conduct conduct that fraud under under the : that is is considered considered fraud the law law dedeof an an intent intent to it spite the absence absence of todeceive deceive because because it has the same consequences as an actual fraud has the same consequences as an actual fraud would would have and and it it is of have is against against public publicinterests interests (as (as because because of the violation violation of of a a public public or private trust or confprivate trust or confidence. in Jersey) Jersey) extrinsic fraud that involved involved in making a offer of of : fraud (as (as that a false false offer compromise) that induces one not to present a case compromise) that induces one not to present a case in one of of the the opportunity to in court court or or deprives deprives one to be be heard also also : fraud that that is is not notinvolved involvedin inthe theactual actualissues issues prepresentedto to a a court court and and that prevents a full full and fair sented prevents a hearing hearing (called alsocollateral collateralfraud) ( called also fraud) (compare intrinsic intrinsic fraud in this entry) (compare entry) fraud in fact Actual fraud” fraudlin : “actual in this this entry fraud in law presumed to to have haveoccurred occurredin inlight light of of : fraud that that is is presumed irrespective of of intent intent to the circumstances circumstances irrespective to deceive deceive fraud in the the factum fraud in the other other party party : fraud in which whichthe thedeception deceptioncauses causes the the nature nature of the to misunderstand misunderstand the the transaction transaction in which esp.fraus I a: omission. tions of the term and some of its legal forms as well as other important legal terms we can all agree with.with with regard to the which he he or orshe she is is engaging esp. duty or the of dence. esp.
aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 legal fraud (constructivefraud” fraudlin 1 in this entry I :: “constructive this 2 : Actual “actual fraudlin fraud” in thisentry entry(used (used esp. jury jury.LEGAL TYPES & DEFINITIONS OF "FRAUD" OF “FRAUD” LEGAL TYPES & DEFINITIONS fraud on the court : fraud involving involving conduct conduct that that undermines undermines the in(asby by improperly improperly integrity of of the the judicial judicialprocess process (as l fluencing a judge.S.these these include: deceptive deceptive [di-T p-tiv] [di’sep-tiv] tending or : tending or having havingcapacity capacity to todeceive deceive Example: deceptive deceptive trade trade practices practices (compare fraudulent fraudulent misleading) misleadin (compare misleading the capacity capacity or or tendency tendency to : possessing possessing the to create create a mistaken understanding or impression (compare deceptive deceptive fraudulent) fraudulent (compare deceive deceive deceived deceived deceiving deceiving to cause to accept accept as astrue true or or valid valid what or : to cause to what is is false false or invalid: invalid: to topractice practice deceit deceit (compare defraud mislead) (compare defraud mislead) fraudulent characterized by.or ordone done by by fraud fraud : characterized false misleading) misleadin (compare deceptive deceptive false false 1: not not genuine. or or perjured perjured testimony) testimony) that the false thatdeceives deceives the trier of in a ajudgment judgment in favor of the trier of fact fact and and results results in party perpetrating the fraud (compare extrinsic extrinsic fraud fraud in in this entry) (compare entry) mail fraud fraud fraud committed by use the postal service : fraud committed by useof of the postal serviceesp. judge. Code described Code wire fraud : fraud committed committed by by using using a a means means of of electronic electronic communication (as communication (as a a telephone) telephone) (seealso also WireFraud FraudAct Actin inthe the Important Important Laws (see Wire Laws secsection) tion) There additional legal terms and and definitions defnitions that actions include: There are are additional legal terms thatrefer referto tofraudulent fraudulent actionsand andpractices. counterfeit (compare counterfeit) defraud [di-’frôd] fd] [di: to deprive of something by fraud mislead [mis-mod] [mis’led] [-lied] -led [’led] -leading -leading to lead into a : to lead into a mistaken mistaken action action or or belief: belief: to to cause cause to to have a false impression: to create a false impression have a false impression: to create a false impression (compare deceive) (compare deceive) 2 a: not or correct correct 2 a: not true true or esp esp : intentionally or or knowingly knowingly untrue untrue or or incorrect incorrect Example: injured by false accusations Example: injured by false accusations QeceptiveUQnisb: intended intended to tomislead mislead or ordeceive deceive : “deceptive” “misleading” leadingl (compare fraudulent) fraudulent (compare 76 . in New Jersey) Jersey) intrinsic fraud fraud intrinsic fraud (as by the of false or forged forged documents. practices. as as describedin in title title 18 section 1341 1341 of the U. by. claims. esp. documents. or or legitimate legitimate 1: genuine. on.com/post/documentViewer. based basedon. esp. authentic. : fraud (as by the use use of false or false claims.or orother othercourt courtpersonnel) personnel) fuencing a also also Ccxtrinsic fraudlin : “extrinsic fraud” in this entry Document hosted at http://www. authentic.jdsupra.
of forms of of stealing stealing formerly treated as as distinct crimes. conspiracy. 2: a a group of conspirators conspirators chain conspiracy : a conspiracy conspiracy in which which the theconspirators conspirators act actsepasepa(as indistributing distributing narcotics) rately and and successively successively (as in narcotics) civil conspiracy civil conspiracy a conspiracy conspiracy that that is not prosecuted a crime crime but but :a is not prosecuted as as a that forms forms the the grounds grounds for a a lawsuit Document hosted at http://www. involves workers or or persons persons in business and a form form of of financial financialtheft thef or or fraud fraud (as (asin insecurities securities a dealing) dealing) 0 . from fromconspirare conspirare to to conspire conspire see see conspire conspire 1: an an agreement agreementbetween betweentwo two or or more more people people to to comcom1: mit an mit an act act prohibited by by law or to commit a a lawful meansprohibited prohibited by law act by means also also the crime crime or or tort tort of : the of participating participating in ina a conspiracy conspiracy crime) (compare substantive crime) Notes Some Somestates states require an overt act in addition to to the the Note: require an overt act in addition agreement to to constitute agreement constitute conspiracy.LEGAL TYPES & DEFINITIONS OF "FRAUD" LEGAL TYPES & DEFINITIONS OF “FRAUD” conspiracy [ken-Tspir-e [k en-’spir-e-se] se] -des pl: pl: -cies Latin Latin conspiratio. conspiratio.jdsupra. grand theft thef of property oror services whose : theft of property services whosevalue valueexceeds exceeds a a specifed amount amount or of a a specified specifed kind kind of property specified (as an an automobile) automobile) (as Notes Grand thef is Note: Grand theft isa afelony. white-collar crime criminal conspiracy criminal conspiracy a conspiracy a crime crime : a conspiracy prosecuted prosecuted as as a [twit-ll%ber [ ‘hwit-’kä-ler-] salaried : crime that that is is committed committedby by salariedprofessional professional workers in business and that that usu.com/post/documentViewer. felony. petty petty theft thef thef of or services : theft ofproperty property or serviceswhose whosevalue value is is below below a a specifed amount specified (called alsopetit petit theft thef) ( called also ) Notes Petty Petty theft thef is Note: is a a misdemeanor misdemeanor but but may may be be aggraaggravated by prior prior convictions vated by convictions.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 theft Old English Old English thiefth thiefth Q)arcenyU : “larceny” broadly broadly : a criminal taking taking of ofthe theproperty propertyor orservices services of anwithout consent other without consent Notes Theft Theft commonly commonly encCnpases by statute statutea avariety variety Note: encompasses by of forms formerly treated distinct crimes.
legal actions. intended or does injure or exploit borrowers for for personal or financial gain or profit that: borrowers personal or financial gain or profit that: (a) (a) (b) (b) (c) (c) preys upon borrowers and the public through any act.or obligation or payment. origination. payoff. legal actions. regulation or act including.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 ItUmy yours] that many of terms need inclusion. crime. RESPA. servicing or foreclosure foreclosure of of a aloan loanof ofmoney. or disclosures and foreclosure. extortion. conspiracy.false. if if such and extrinsic extrinsic fraud. fuge. its its time timeto tomove moveon onto toexpose expose and highlight thevarious various forms forms of of predatory predatory lending lendingwe we have have identifed and others recently discovered. subterinvolves any or of practice of fraud. or violates one or more provisions of any Federal or state violates one or more provisions of any Federal or state law. Fair Debt In Lending. inclusion.FINAL DEFINITION OF PREDATORY LENDING FINAL DEFINITION OF PREDATORY LENDING Document hosted at http://www. or servicing or collection of money that is designed. or deceit. practice. or provides a misstatement or misrepresentation of a provides a misstatement or misrepresentation of a borrower's terms. regulation or act including. Fair Housing Act. Fair Credit Act. of money including. or violates one or more provisions of any criminal act. RESPA. intrinsic intrinsic and deception. servicing or collection of money including. conspiracy. servicing collection of “Predatory Lending” any loan. lending. usury. action. Terms It’s myopinion opinion[and [andhopefully hopefully yours] that many ofthe theadditional additional termslisted listedabove above need Terms such as aswhite-collar white-collar crime. fraud.wire wireand andmail mailfraud. but not limited to. (d) (d) (e) (e) (f) (f) I that this this is isaa good working model [whatdo do you think. or trickery. identified and others recently discovered. Federal Truth lations USC 12. act. practice. false. or Trade Practices Acts. lending. payoff. or involves any act. or violates one or more provisions of any criminal act. but not limited to violations of of USC TitleTitle 12. actionaction or practice fraud. account. duplicity. or of policy of fraud. obligation payborrower’s terms. extortion. preys upon borrowers and the public through any act. account.jdsupra. As Assuch. deceit or trickery in the securitization. definition lending. subterfuge. but not limited to. Fair Debt Collection Act Act and various State Unfair & Deceptive Collection and various State Unfair & Deceptive Trade Practices Acts. HOEPA. deceit. duplicity. Fair Credit Act. deception. intended or does injure or exploit money that is designed. Federal Truth In Lending. servicing or collection of any loan of any loan origination. disclosures and foreclosure.com/post/documentViewer. highlight the lending. 118 . deceit or trickery in the securitization. rates of interest. HOEPA. or lends money to individuals at exorbitant or usurious or usurious lends money to individuals at exorbitant rates of interest. collection. or trickery. usury. action. such.let letme meknow] know]of ofaa defnition for predatory I believe believe that good working model [what you think. money would would all used servicing or all constitute constitutea aC “predatory” action! So *edatoryllction! So CrorkingTdefnition [until further notice] would be expanded our final “working” definition [until further notice] would be expanded to toinclude: include: "Predatory Lending" is any is loan. used in in the the collection. or ment. but not limited to violaw. or policy fraud. Fair Housing Act.
PRIMARY "FORMS" OF PREDATORY LENDING PRIMARY “FORMS” OF PREDATORY LENDING While Whilethe the primary primarygoal goal of of this this report report is to report would be on predatory predatory lending lendingmortgage mortgageabuses. homes. individual or company including banks. agent. The Thefve five  primary areas of of what what we we as“Predatory 4redatory Finance FinanceLending” Lendinglinclude: define as include: Lending (1) Predatory Predatory Payday Payday Lending (2) Predatory Predatory Rent-To-Own Lending Title Lending (3) Predatory Predatory Title (4) Predatory Pawn Pawn Lending (4) Predatory Lending Anticipation Loans (5) Predatory Predatory Refund Anticipation Loans predatory predatory lending lending that that we we defne defineas: as: FinanceULending (1) Predatory Predatory “Finance” Lending (2) Predatory CBankULending (2) Predatory “Bank” Lending (3) Predatory Predatory OrlortgageULending “Mortgage” Lending these areas areas of predatorylending lending contain contain Each of these of predatory and forms of predatory many types types and predatory lending lending pracpractices and far more schemes and scams for each. subprime subprime lenders lenders and and smaller smaller bank. individualsand and publicfinance fnancecompanies.jdsupra. finance companies. and thrifts use to finance the purchase. major banks and financial institutions have subsidiariesand anddivisions divisions that that are areinvolved involved tions have subsidiaries in in predatory predatory lending lendingpractices. In tices and far more schemes and scams for each. thrif thrift or loanof of money for forreal real estate. each. lends lends you than the you a a lot lot less less than the blue blue book book value value of of your yourcar. let us easily each of three major areas of predatory lending listed above three major areas of predatory lending listed above as follows: as follows: Predatory“Finance” 4inanceULending is the the loan loan of of Predatory Lending is under one one or or more more of of our definimoney that falls falls under definitions of predatory predatory lending by pawn pawn brokers. The The lender. newspapers ads and junk on television. private businesses. We have highlighted highlighted three three   major We have major QreasUof “areas” of Document hosted at http://www. or loan money “regulated” bank. car.com/post/documentViewer. However. estate. fnance ker. Have Haveyou you everseen seen those those adsthat that promise promise you you an animmediate immediate payment payment of your your ads tax refund? refund? That’s Thatlskalled a“refund Qeuund anticipation loanl tax called a anticipation loan” and immediate and immediate means means on on a a Annual AnnualPercentage Percentage ReReturn basis a huge pay day of interest to the tax offce turn basis a huge pay day of interest to the tax office checking service service thatoffered ofered it it to you. nottfor real estate. major banks and financial institubank. usually a pawn shop operator or small outfit. mortgage mortgagecompanies companies and thrifs that is companies. newspapers ads and junk ever mail sent sent to to our our homes. upkeep. of real estate. thrift loan of money that (. However. or cash cash checking that you. They They take take title to to your yourcar car and and charge charge you a a high percentage of interest interest for for a a relatively relatively small small loan loan and and percentage of if dontpay if you you don’t pay Owatch – watch out! out! Predators are waiting to take of their their Predators are waiting to take advantage advantage of primary areas next victim. refinance or or use use of real homes or or property. Predatory“Bank” (ankULending Predatory Lendingis isthe the loan loan of of money under one one or or more more of of our our definitions definitions of that falls falls under predatory any “regulated” QegulatedUbank. companies. and define each and distinguish their differences. what we we call Predatory “Title” Lending. entity. agent. nonregulated finance companies. homes or property. Predatory “Mortgage” OvlortgagelLending is the the loan loan of of Predatory Lending is under one one or or more more of of our definimoney that falls falls under tions of of predatory predatory lending lending by by any any entity. abuses. broker. In easilydefine defne the each of the explaining each. individuals public does not not include any loan of money does money that that involves involves a a ( gulatedIbank. How about fas&Have How about need need cash cash fast” Have poor poor credit? credit? Own a Own a car? car? These These are are well well known known ad ad appeals appeals for what CTitleULending. billboards. homes or loan of money that “is not” for real estate. It It nesses. refnance use to finance the purchase.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Predatory “Finance” FinanceULending Predatory Lending Predatory “Finance” 4inanceULending Predatory Lending involves involves various various schemeseach each of us may be familiarwith with through through ads schemes of us may be familiar ads on television. practices. homes Predatory“Bank” BankULending Predatory Lending Many Manybelieve believe that that predatory predatorylending lendingis is relegated relegated to the of mortgage brokers and select group group to the abuses abuses of and a a select of pawn of pawn shop shop owners. brokers. thrif or predatory lending by any bank. property. brokers. estate. homes homes or or property. The Thetwo twomajor majorareas areas dPredatory Bank Lending” LendingUwe found include: include: of “Predatory we have found (1) Predatory Predatory Credit Card Lending (2) Predatory Predatory Subprime Lending A . we would be ignorant and briefly briefy detail other ignorant not not to to acknowledge acknowledge and predatory so that that we we can can identify identify predatory lending lending practices practices so and define each and distinguish their differences. lender. billboards. upkeep. usually a pawn shop operator or small outfit. individual or company including banks. owners.
fraud. or funded by aa regulated or or major banking. sanctioned.poor poorcredit. notice. Some common common Predatory Predatory Credit CreditCard CardLending Lendingschemes schemes include: include: (a) (a) (b) (b) (c) (c) (d) (d) (e) (e) (f) (f) Delaying the of payments so as to make late fee assessments Delaying theposting posting of payments so as to make late fee assessments and andcharges.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Predatory “Credit (Credit Card” CardLLending Predatory Lending Perhapsyou you have haveseen seen thehundreds hundredsof ofcredit credit card card ads adson on your your televisions televisions sets setslate lateat atnight night or or of prePerhaps the preoffers in in your your mail box. known unauthorized Re-posting known unauthorizedtransactions.gold goldcards. transactions. transactions. supported. Many and divisions divisions that that participate in Many major majorbanks banks own ownmortgage mortgage and and subprime subprime mortgage mortgage subsidiaries subsidiaries and Predatory Mortgage Lending abuses. Various fees for ®ver the limitlcharges when actually such fees are assessed when QuthorizationsTgo Various fees for “over the limit” charges when actually such fees are assessed when “authorizations” go over the the limit limit and of the holder. Bait and ratesthat that change changewithout without notice. cards. sanctioned. credit. No interest approved offers Nocredit. institution. change change of hitting one of. credit. small-print small-print notice. supported. Not properly Not properlyinvestigating investigatingcomplaints complaintsof offraud.had badcredit. hitting oneor ormore moretriggers triggersplaced placedin inaanew newagreement agreement the the holder holder was was not not aware aware of.approved approved or funded by regulated major banking. thrift 20 . Predatory abuses. companies.abuse abuse or or unauthorized unauthorizedtransactions. charges. credit. created.PRIMARY "FORMS" OF PREDATORY LENDING PRIMARY “FORMS” OF PREDATORY LENDING Document hosted at http://www. of ownership ownership or or Bait and switch switch interest interest rates notice. over and not notthe theactual actualcharges charges of the credit credit card card holder. transactions.jdsupra.low lowinitial initial interestrates rates are are just some of of the the appeals appealsthey theyuse.com/post/documentViewer.Credit Creditcard cardselection selectionhas has become more diffcult than than the the selection selection of of out out local local and and some become more difficult long distance phone companies. thrifor orfinancial fnancial institution. We We term term this this practice practice Predatory Predatory Subprime Subprime Lending Lendingwhen whenis iscreated. Delaying credits Delaying credits for for known knowndisputes disputes and and unauthorized unauthorizedtransactions. use.
While While some some may may be be concerned concerned about the the varivarious social consequences. distributed to “guarantee” (?uaranteeTtheir and protections in place place to their distribution to the local and street dealers for sale to drug drug bution to the local and street dealers for sale to wewouldn’t wouldn"ave addicts. In predatory mortgage lending. occur. process. Think of of it it like the drug trafgage lending Think i ckers and producers of the Colombian fickers and producers of the Colombian drug drug cartel. produce.Typically. the brokers would have no supply of money.We Wewill will use usethe thedefinition defnition of area lending. notes. home a first first mortgage mortgage on on a a loan. home is is pledged for mortgage loan under our There stages include: There are are four  primary primary stages where where predatory predatory mortgage mortgage lending lendingcan canoccur.it itis isaa mortgage loan under ourdefinition. the firms closely monitor monitor what closely what predatory predatory fnanciers financiers are are sellselling. in the same vein as the Colombian Drug Cartel.jdsupra.deeds deeds and other financial instruments in whatlsJ termed financial instruments in what’s subprime and B& C credit Wall Street subprime and B&C creditmarkets markets by by the the Wall Street i rms. mortgage. a a mortgagefor forwhatever whatever purpose. Their with that Their CFOs CFOs and and brokers brokers charged charged with that reresponsibility only examine the return on investment of such such security security products and and not not the therisks.” *otection and If enforcement. ing. risks. a arefinance refnance of of the the property. property. anaanalyzed or contemplated. defnition. the brokers would have no supply of money.U If the the drugs drugs werenUmanufactured. loan. f and derivative derivative prodof mortgage mortgage backed backed securities securities and ucts to institutional investors such as mutual funds. A home a house of loan and debt. of predatory predatory lending lending that that we we defned defined earlier earlier with only one exception. f They distribute the drug They produce. we will define only those loans where a borroweruses uses houseor or property property as assecurity security ofthe the loan and debt. effects effects and social consequences of such investments. In predatory mortgage lending. contemplated.LARGEST FORM OF PREDATORY LENDING LENDING LARGEST FORM OF PREDATORY OdortgageULending Predatory “Mortgage” Lending Document hosted at http://www. In most cases. Without the purchase contractors. The Wall Street Streetfirms firmssell sellvarious ( curitizationsU The Wall various “securitizations” itlsJthe frst phase and step step of of the the predatory predatory mortmortit’s the first phase and gage lendingprocess. 27 . Typically. and social consequences of such investments. These stages are discussed pages. The Therisks risksmay maybe befar farlarger largerthan thanstated.this thisis isin inthe theform form of of a a mortgage. abuse.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Perhapsthe the largest largestand andmost mostcostly costlyarea area ofpredatory predatorylending lending abuse.com/post/documentViewer. the frms should more ous social consequences. pension leaders and and executives executivesof ofthe thepurchasers purchasersof ofthis thissubprime subprime ers paper don’t donUeven know the efects of what their even know the effects of what their purchaseis isdoing doingto to millions millions of chase of Americans. pension funds funds and andcorporations. group. America. Lending. manufacture and distribute and offer and offer C “protection and enforcement. loan. we will defne only those loans where a borrower with only one exception. stated. Large-scale local operations would be too easily Large-scale local operations would be too easily dedetectable to local authorities. Think Thinkof ofcertain certainWall WallStreet Street investment investment banks banks in the same vein as the Colombian Drug Cartel.These Thesestages stages include: Stage 1 I Stage Stage 2 2 Stage Stage 3 Stage 3 Stage 4 4 Stage Predatory Mortgage Securitization Predatory Mortgage MortgageOrigination Origination Predatory Predatory Mortgage Servicing Predatory Mortgage Servicing Mortgage Foreclosure Predatory Mortgage Foreclosure These stagesof ofpredatory predatory mortgage mortgage lending lending are discussedin in the the following following pages.and andthe thefocus focusof ofour our group. phase of In most cases.If If your your home home or or any any part part of of the the equity equity of your home equity loan or second second mortgage purpose. Predatory Mortgage Securitization Predatory Mortgage Mortgage Securitization Securitization is is a a major Predatory phase of Predatory Predatory Mortgage Mortgage Lending. Many Many leadbanks. we haveaadrug drug problem problem in inAmerica. is is in in the Perhaps of areaof ofpredatory predatorymortgage mortgage lending. a home home improvement loan. firms. cartel. Americans. pledged as assecurity securityor orcollateral collateral forthe theloan. Without the purchaseof ofnotes. Local would be Local mortgage mortgage companies companies or brokers would be broke [pardon the pun] pun] if not for the supply of ready if not for the supply of readycash cash to these thesebrokers brokersand andto tounscrupulous unscrupulous home available to contractors. corporations. ucts to institutional investors such as mutual funds. mortgage loan could be a loan. weren’t manufactured.
Overvaluing the by accepting accepting principal principal balance and payment payment amounts amounts Overvaluing the loan loan poollsJprincipal pool’s principal balances balances by balance and from the seller that the new servicer and securitizer know are suspect.Securitization PREDATORY “MORTGAGE” Document hosted at http://www. Knowingly accepting not disclosing to investors problems with with loan loan documentation. servicer. actions. 1. from the seller that the new servicer and securitizer know are suspect. 5. of Failing to to record record in in country countryrecords records the thetrue trueand andreal realownership. investment existed in the servicing operation of the bank. fines. Hiding and documented high high risk risk item. investment bank bank or or securitizer securitizer has hasknowledge knowledgethat thatproblems problems or or potential potential fraud fraud existed in the servicers. 6. fraudulent or misleading. servicer. broker selling. and other other servicing Under-reporting historical data on expenses. Failing to of side deals. fees. altered altered or fraudulent documentation documentation in in loan loan fle. increase the Under-reporting historical data on expenses. 3. maintenance maintenance and and control controlof ofpromissory promissorynotes. deeds and other mortgage documents which were part of sale. 7. investment bank or securitizer has knowledge that problems or potential fraud existed in the servicers.legal legal fees. custody. portfolio. 8. investment bank or securitizer has knowledge that problems or potential fraud existed in the servicing operation of broker originating. assignment or transfer. advance prior of to increase thevalue valueof ofaamortgage mortgagepool poolportfolio. 10. 11. or transferring transferring the the the servicing operation of the the bank. Securitizations that that are are termed termed and and classified classifed as as“whole (i Thole loanland OrueTsales (withoutrecourse” recourselthat Securitizations loan” and “true” sales “without that are really really financing financing mechanisms with undocumented for recourse which are mechanisms with undocumentedside sidedeals deals and and agreements agreements for recourse which may not and may may have tax and and reporting reporting consemay not be be able able to to be be classifed classifiedas as investments investments in in real real estate estate and have tax consequences for purchasers. foreclosure foreclosure costs costs and servicing related related data that was previously picked picked up by data was previously by the the servicerlJparent servicer’s parent company company or or another another seller seller in inrecourse recourse provisions not contain. pending. securitizations.chain chainof of titlesand andownership. 11. 12. 4. independent independent and and fail-safe fail-safe due loans being chased. 15. fling and CTithout Stamping. owners.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Our investigation Our investigationand andanalysis analysis of ofvarious various predatory predatorymortgage mortgagesecuritization securitizationpractices practicesand andhave have discovered discovered the following: 1. 3. fer. documentation.threatened threatened legal legal actions. titles ing. file. sanctions. servicers.assignment assignment and and endorsements endorsements of promissory notes. 9. servicer. assigning or transferring the the servicing operation of the bank. fnes. selling. 15.deeds deeds and and other loan documents. chased. court rulings. servicing. Reporting problems problems in loan loan servicing. originating. recourse” when in fact there were recourse provisions. current regulatory actions or complaints made about loans assigned. 9. broker originating. deeds and other mortgage documents which were part of sale. Hiding or Hiding orconcealing concealing from frominvestors investors the the focus focus on predatory lending lending in insubprime subprimesecuritizations securitizations and potential potential regulatory regulatory actions. provisions that the the current current deal deal does does not 22 . 7. bank. advanceand andprincipal principal balances balances priorto tothe thedate date ofsecuritization securitization toartificially artifcially Manipulating escrow. litigation opinHiding andconcealing concealing from from investors investors documented litigationpending. Knowingly of loans loans offered offered for for securitization securitization when when Knowinglyaccepting acceptingvia viacomputer computertapes tapes the the principal principalbalances balances of the servicers.PREDATORY "MORTGAGE" LENDING -LENDING Securitization . 8. actions. 13. selling. due diligence diligenceon on individual individual loans being purFailing to to perform perform detailed. buyers.com/post/documentViewer. 10. Knowingly of loans loans offered offered for for securitization securitization when when Knowinglyaccepting acceptingvia viacomputer computertapes tapes the the principal principalbalances balances of the servicers. item. assigning or transferring the loan securitizing the the loan loan pool thefull full and and loan and and the the new newowners. sellers and sellers and buyers. 13. 5.recourse recourseand andindemnification indemnifcation agreements Failing todisclose disclose the the details details of side deals. investigations and other mator disclosure disclosureto toinvestors investorsin infilings flings with ters or with the theSEC SECfor formortgage mortgage securitizations. 2. Manipulating escrow. ownership. 12. ownership. origination origination or underwriting underwriting operations. purchasers. loan. 6. 14. current regulatory actions or complaints made about loans assigned. judgements. broker originating. filing andrecording recordingloan loanand andmortgage mortgage instruments instruments that that indicate indicate loan loan was was sold “without recourselwhen in fact there were recourse provisions. assignment or transpromissory notes. Reporting problems problems or or improper impropercustody. operations. investigations and other mation letters and other items. 14. servicer. detailed. 2. court rulings.jdsupra. judgements. selling. sanctions. missKnowingly accepting loans loans and and not disclosing to investors problems missing.gray gray legal legal opinion letters and other items. fraudulent or misleading.servicer servicer and and assignee assignee securitizing pool does does not not possess possess the complete loan transaction transaction histories histories for for each each borrower. agreementsbetween betweenservicers. 4. notes. assigning assigning or loan.
23. servicer have a Ofering for sale and securitization interests in notes. control.jdsupra. Non-reporting of and servicing servicing problems problems identified identifed at Non-reporting oflegal legalproblems. 18. deeds or other other mortgage mortgage instruments instruments that that the the Offering for sale and securitization interests in notes. illegal. abusive collection and and foreclosure foreclosure measuresthat thatmay mayput putportions portions of of the the loan pool pool at risk measures 0 . Ofering for sale or other mortgage mortgage instruments instruments that the Offering for saleand andsecuritization securitization interests interests in in notes. servicer. problems. 19. 17. servicer or securitizer is owned by someone other than party identified in the prospectus. Ofering for sale or other mortgage mortgage instruments instruments that the Offering for saleand andsecuritization securitization interests interests in in notes. 20.com/post/documentViewer.PREDATORY "MORTGAGE" LENDING ABUSES PREDATORY “MORTGAGE” LENDING ABUSES Additional AdditionalPredatory PredatorySecuritization SecuritizationMortgage MortgageLending Lendingabuses abuses include: include: Document hosted at http://www. 23. Manipulating sonot not only only to to earn earnadditional additional interest interest from from borrowborrowManipulatingthe theprincipal principalbalances balances of of borrowers borrowers so ers not not owed. notes.abuses abuses and atservicer. 21. 17. but but to from servicing paid to the from investors. 19. deeds deeds or servicer or securitizer is owned by someone other than party identifed in the prospectus. 20.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 16.frauds. deeds deeds or servicer or or securitizer securitizer does does not not have a real real interest interest in. 21. Failing to disclose predatory lending practices. Understating historical Understating historicalprepayment prepaymentor orforeclosure foreclosurerates. 22. 22. frauds. else. deeds deeds or servicer or or securitizer securitizerdoes doesnot nothave havein intheir their custody custody or or control. rates. servicer Ofering for sale and securitization interests in notes. ers toincrease increase the revenue revenue from servicing fees fees paid the servicer servicer from investors. illegal. or other other mortgage mortgage instruments instruments that that the the Offering for sale and securitization interests in notes. notes. abusiveor or criminal criminal collection Failing to disclose predatory lending practices. in. 18. 16. deeds or servicer or or securitizer securitizer has has offered ofered for servicer forsale sale to tosomeone someoneelse.
Costs. Racial & Demographic Steering 27. Adding Insincere Insincere Or UnwillingCo-Signers.com/post/documentViewer. Misrepresenting Misrepresenting To gations. High Points Points [5% And Higher] Or Or Padding Padding Or Adding Adding Non-Existent Non-ExistentClosing ClosingCosts.brokers brokers and and banks. During this which includes prior to to visiting visiting a mortgage broker broker or or applying applying for to During thisprocess. Loan. Falsifying On Loan 12. 10. Reg Z Z And Other Reg OtherDisclosures Disclosures To To Borrower. Mortgages. Information. 11. Payments. 23. Making Making Loans Loans To Mentally. Refinancings. Filling Out 12. Requiring Home Insurance From From Loan Loan C ompanylSJAgent On Loan. Falsely FalselyIdentifying Identifying Loans Loans As AsLines LinesOf OfCredit Credit Or Or 10. M ortgagesThat T hat ContainRestrictive RestrictiveArbitration Arbitration 23. 9. Asking Asking The The Borrower Borrower To To Sign Sign(?BlankULoan “Blank” Loan Documents Then Filling Out BorrowerlSJLoan Then Filling Out Borrower’s Loan Applications Fraudulent Information. Appraisals. Company’s Agent On Loan. And Rights. day. Duties And Rights. Provided. Clauses. Solicitations & Ads To Targeted Neighborhoods 32. 29. 11. companies. 15. Illiterate. Applications Fraudulent 4. Mentally. Home Owner’s Owner lnsurance 30. Open End End Mortgages. False RepresentationsTo ToBorrowers BorrowersBy By Word Word 9. 20. tion. Representing Mortgage RepresentingThat That The The Bank Bank Or Mortgage Company Will Will Send Company Send Monthly Monthly Payment Payment CouCoupons To Borrower Instead Of Payment Instead Of Payment Books Then Then Refusing Refusing To To Do Do So. Some Some of ofthese these actions begin before a borrower even walks into the offce of their local bank or mortgage broker. 19. Below actions begin before a borrower even walks into the office of their local bank or mortgage broker. Balloon Payments."Originations" PREDATORY MORTGAGE . 25. Paying Lower Debt DebtAnd AndCost CostMortgages Mortgages Paying Off Of Lower Then Then Shifting Shifting To To Higher HigherCost CostMortgages. Annual Interest Rates In Excess Of 8 Points Points Over Over 2.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Many come at at the the very very inception inception of the mortgage loan process. Elderly Elderly. 20. Changing ChangingThe LoanTermsAt 5. Fees. Excess Of 21. industry. Clauses tion. Illiterate. gations. Adding Or Unwilling 1. ing. Fraudulent Or Or Infated 14. Kickbacks To To Mortgage Mortgage Brokers For Yield Yeld Spread 18. Falsifying On Loan Applications Applications & & Documents. Intentionally 17. Required Disclosures. process. ClausesIn In Mortgages Mortgages For Negative Amortiza6. Required Disclosures. 13. Mortgages Contain Clauses. 24 . 6. to the process is most consumers consumers as the mortgage mortgage industry. Loans.jdsupra. Co-Signers. However. 26. Unbundling By 32. Credit Insurance On On Loans. which includes all all steps steps prior a mortgage for a a mortgage mortgage to your closing your closingday. 3. Padded 24. Improvement ScamsFinanced FinancedBy By PredaPredatory Lenders. 3. 16. So. Requiring Credit Insurance 29. 24. process. occur. Kickbacks Brokers For Spread Premiums. Shifting Unsecured Debt Into Into Secured-Debt 31. The Loan Terms At Or Or PriorTo Prior To ClosClosing. stage. Under-educated Or Incapacitated Homeowners. Padded Recording RecordingFees.“Originations” Predatory Mortgage MortgageOrigination Origination Predatory Document hosted at http://www. InflatedAppraisals. Unbundling ByItemizing ItemizingDuplicate DuplicateServices Services And Them. This This Many predatory predatorymortgage mortgage lending lendingabuses abuses come process isknown known to most asthe the loan loan application application and approval stage. Below are are of the predatory mortgage practices some of mortgage origination origination practiceswe weand andothers othershave havediscovered: discovered: 1. 8. Forging Signatures SignaturesOn On Loan Loan Documents Documents And 13. 7. Borrower. Home Home Improvement Scams 16. Rescission. Providing False FalseOr OrFraudulent FraudulentInformation Information On On 26. Under-educated Or Incapacitated Homeowners. 31. Bogus Broker Fees. tory Lenders. 17. Annual Interest Rates In Excess Of 8 Prime. this stage is known as mortgage origination which is basically the start and creation of the mortgage. Bogus Broker Fees. Racial & Demographic Steering 28. ToThe The Borrower BorrowerTheir Their ObliObli22. We andothers others have discovered a of series of that actions that we believewhat constitute what we shall We and have discovered a series actions we believe constitute we shall call “predatory call ( origination” redatory originationlthat are by predatory mortgage mortgage that areutilized utilized by predatory mortgagecompanies.PREDATORY MORTGAGE LENDINGLENDING . Unsecured Debt Secured-Debt & AdsToTargeted 31. False Representations And In In Writing Writing Of OfTerms Terms And Conditions And Conditions Of Of Their Their Loan. To To Rescission. banks. Failing To Represent RepresentTo ToBorrower Borrower Their Their Rights 8. IntentionallyStructuring StructuringLoans Loans With WithPayments Payments The Borrower CanUAfford In Order To One Borrower Can’t Afford On Property Property And And Earn More Day Foreclose Foreclose On Profit. 14. Clauses Clauses In In Mortgages For Balloon 7. Loans In Excess Of 100% 100% LTVs. 18. Out BorrowerlJLoan Borrower’s Loan Applications Applications & & Documents Other Than Than DocumentsWith With Information Other What What Borrower Borrower Provided. 27. Loan Flipping By 19. Or 15. 2. Loan Flipping By Numerous Numerous Refnancings. And Charging ChargingSeparately Separately For Them. 4. Mortgages. a a series series of actions occur. 5. this stage is known as mortgage origination which is basically the start and creation of the mortgage.
Changing. 21. 12. Mislabeling ing Out. Billing Billing Borrowers On A Receipt 1. Posting Of Payments Made By The Borrower PriorTo Late Fee Date The Borrower Prior To Late FeeAssessment Assessment Date To Assess Assess AndCharge Charge A A Late Fee FeeTo To The The So As To And Borrower. Ledger. Failing 11. Mislabeling Or Concealing Charges Made To A BorrowerkAccount On Their Statements. For. Demand OfExcessive Excessive Prepayment Prepayment Penalties Penalties 10.WhitWhit3. it is the area. 5. Changing.PREDATORY MORTGAGE LENDINGLENDING . Insurance. Failing To 13. area.Fraudulent Fraudulent OrDummy Dummy Credit 7. ToA ABorrower’s BorrowerkAccount When tion Measures. Altering. such as billing and collection of payments and the payment and collection of taxes and loan in good standing. 22. Instructing The Not To In Any Any 20. 8. Fee. Redacting. Force Placing One One Or Or More 17. Demand Of 9. Replacing. Redacting. Mislabeling Or Concealing Charges MadeToA 21. Creating False. Escrow Dates. 18. As As such. Charging ChargingThe With Any 5. Holding Funds In Suspense And Not Crediting Them Them To To Account AccountSo SoAs AsTo ToIncrease Increase CalculaCalculations Of Escrow Balances And Payments Around tions Of Escrow Balances And Payments Around Escrow Analysis Analysis And And Adjustment Adjustment Dates. Replacing. 13. closed.Fraudulent FraudulentOr OrDummy Dummy Book6. Failing To Stop Stop Credit Credit Reporting For 60 Days 15.jdsupra. surance. Or Or Debit In A ABorrower M oan Or Or Or DebitTransactions Transactions In Borrower’s Loan Escrow Account. Failing To To Post PostOr Or Report ReportA A Customer’s CustomerkGood 12. Creating False. Amounts. Out.com/post/documentViewer. Out. Not Not Reporting Disputed 22.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Perhapsthe the one one single single biggest biggestarea area ofpredatory predatorymortgage mortgagelending lending abuse abuseis isin in the servicing of mortgage Perhaps of loans. Holding Payments 19. Holding Funds In Suspense And Not Crediting 18.“Servicing” PREDATORY MORTGAGE Predatory Servicing Predatory Mortgage Mortgage Servicing Document hosted at http://www. Demand Sent To To The The Borrower. Redacting. Good Credit To Credit Agencies. Delaying The Posting Of Payments 8. funded and closed. Some Some of ofthe theabuses abuses and violations of laws laws we we have have discovered mortgage servicing include: 1. after loan is is approved. Whit2. Mislabeling ing Misstating. 3. Replacing. Whiting Out. Mortgage Mortgageservicers servicersare are supposed supposed to to carry carry out outall allthe thenecessary necessary steps steps and to keep keep a a mortgage loan in good standing. 16. Used Used As As Collection Measures. 4. TheBorrowerlsJAccount Borrower’s Account With AnyFee Fee Without Without First First Providing Providing Notice And Demand To The Customer So At At To Affect To The CustomerFor ForSuch Such Fee Fee So Interest Amortization And Allocation. Altering. Holding Payments In InSuspense/Unapplied Suspense/Unapplied Accounts The Borrower Borrower Of counts And And Not Not Notifying The Of Such Actions Actions Or Or Reflecting ReflectingThe The Credit Credit Of Of The Such Payment In In Any Payment Any Payment Payment Or OrEscrow EscrowBalances Balances On Loan Demand Letters LettersOr Or NoOn Loan Statements. Instructing The Borrower Borrower Not To Send Send In PaymentsWhile WhileTheir Their Complaints Complaints Or Or Disputes Payments Disputes Are Investigated InvestigatedAnd AndThen Then Charging ChargingThem Them A A Late Late Fee. abuse. 19. OfExpenses Expenses And Fees Fees Not For. To Account When The Has Charged ChargedThe The Borrower Borrower A Late The Servicers Servicers Has Fee. Ledger. 15. After Receiving Receiving A Dispute. Reporting Disputed DisputedAccounts Accounts As As Disputed To Credit Reporting Agencies Credit Reporting Agencies 0 . Force Placing An Insurance Policy On Property When When Borrower Borrower Has HasTheir Their Own Own InInProperty surance."Servicing" . 7. Mislabeling Or Or Mischaracterizing Transactions In A BorrowerlSJ Mischaracterizing Transactions In A Borrower’s Loan EscrowAccount AccountHistory HistoryThat DifLoan Or Escrow That Are Different Than Than Other Other Histories Histories In In Time Time Or The ferent Master Loan History And General Master Loan History And General Ledger. Altering. 14. Borrower’s Account On Their Statements. After A Written Written Dispute. Demand Demand Of Not Obligated Obligated 10. Mislabeling Or Or Mischaracterizing MischaracterizingTransactions Transactions In InA ABorrowerlSJ Borrower’s Loan Or Escrow EscrowAccount AccountHistory HistoryThat DifThat Are Different The ferent Than Than Other Other Histories Histories In In Time Time Or The Master History And Master Loan History AndGeneral General Ledger. Interest Amortization 6. such as billing and collection of payments and the payment and collection of taxes and insurance from an it is afer your loan funded and insurance from an escrow escrow account. 14. 11. To Provide Provide Accurate Accurate Loan Loan Balance Balance Amounts. such. Creating False. Property Inspections. Statements. Misstating. Credit To Credit Agencies. Force Placing An Insurance Policy OnBorrower’s Borrowerk 16. Bookkeeping Transactions TransactionsIn InA A Borrower’s BorrowerlJLoan Or keeping Loan Or Escrow Account. Inspections. Failing To Provide Provide Accurate Accurate Loan Loan Payoff Payoff Failing To Amounts. Charging Charging Property Collec4. Misstating. Misstating. 2. To Identify Identify Charges Charges Made Made To To A A Failing To BorrowerkAccount On Their Statements. System. False. and operations operations to mortgage loans. 9. Borrowers On A Bill Bill& & ReceiptSystem. Altering. Changing. approved. Force Placing MoreInsurance Insurance Policies Policies On BorrowerlsJProperty= When The The Servicers Has On Borrower’s Property When Servicers Has Already Forced Placed PlacedTheir Their Own Own Insurance. Borrower’s Account On Their Statements. 17. that discoveredin in the predatory mortgage is is ripe ripe for for abuse. tices Sent 20. Replacing. Escrow Account. Fee.
Use Of Of Abusive Abusive & & Threatening Collection Collection Prac39. Altered Incomplete Account Histories To The Borrower. Identifed. 34. Refusing To Provide Loan Or Account HistoTo The The Borrower. Payments. Fee. Escrow Payments. Sending Borrowers Payment Coupons Coupons After After The The 37. 26 . Threatening To ImproperlyRuin Ruin Customer’s Credit Reputation Reputation 39. PaymentsAnd And Fees FeesThat 26. Fraudulent. 42. Payments That Were Previously Discharged Discharged By By A A Federal BankWere Previously Federal Bankruptcy Court ruptcy CourtBack BackInto IntoThe TheBorrowerlSJAccount Borrower’s Account As As A Misc. Refusing To Accept The BorrowerlSJOwn 32. Charges. On Loans.PREDATORY MORTGAGE LENDINGLENDING . 29. ries To 36. Refusing When Borrower rower When Borrower Is Disputing DisputingCharges Charges To His Or Her Account. Escrow Payments. 27. Borrower’s Own Hazard Insurance Without Payment ard Insurance Without Payment Of OfA AFee. Providing Providing The The Borrower BorrowerWith With Notices Notices Of Of In30. 33. 28. Problems 35. tices. Items And AndExpenses Expenses Not Previously Demanded Into The Previously Owed Owed Or Or Demanded BorrowerkEscrow Borrower’s Escrow Account. “Mailing” Address. Over-Calculating And Then Over-Demanding 24. Placing Non-Recoverable Corporate 27. Loan. Escrow Escrow Adjustment. 40. ments. l Or Demands. 43. Using TheWrong WrongLate LateFee Fee Assessment Payment Notices. Practices. PrinLoan Payments. Late FeeAssessAssessments Accounting Adjustments Adjustments ments And Other Accounting Or From The Date In Which Which Errors. fated Payoffs Refusing To To Accept Accept Payments PaymentsFrom From The The Bor31. Not The The Property Property Address. Amortization Schedules. Threatening To Improperly AA CustomerlSJ 38. Using The Payment Notices. 30. Using The Wrong Wrong Due Due Date Date On On Payment No42. Not Manually ManuallyRecalculating Recalculating Loan Payments. 37. Account Histories To The Borrower. Over-Calculating And Then Over-Demanding Principal And Principal AndInterest InterestPayments. Placing Debts. Using The AssessmentDate DateOn On 44. Mistakes Mistakes Or Problems Were WereMade MadeTo ToThe TheDate DateIdentified. Using Inspections” As Collection Collection Using “Property 4roperty InspectionslAs Measures. Using Using The The Wrong Wrong Index Index For For Application Application Of Of ARM Loans. Account. Charges. Errors. 32. Providing Fraudulent. Refusing To Accept The BorrowerlSJOwn 33.“Servicing” PREDATORY MORTGAGE Additional AdditionalPredatory PredatoryMortgage MortgageServicing ServicingAbuses Abuses Document hosted at http://www. Placing Debts. His Or Her Account. Amortization Schedules. Measures. Unto A Borrower’s Escrow Account.jdsupra. 43. Account. PrinLate Fee cipal And AndInterest InterestAllocations. Sending Borrowers Payment Due Date Date Of Of The The Loan. BPOsOr OrAppraisals Appraisals On OnA ACustomerlsJ Customer’s Property And Then Charging Their Property And Then Charging Their Account. 38."Servicing" . tices. Refusing To Send Send Borrowers Borrowers Payment Payment Coupons Coupons 36. Interest For ARM Loans.com/post/documentViewer. 24. Using TheWrong WrongDate DateFor For Interest Interest Calculations On Loans.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Additional discovered in in predatory predatory mortgage include: Additionalabuses abuses and and violations violations of oflaws laws we we have have discovered mortgage servicing servicing include: Ordering BPOs 23. Refusing To To Not To Their Their Designated Designated OdailingUAddress. Placing Non-Recurring Non-Recurring Items Not 28. Payment Notices. 25. flated Payoffs Or Demands. Ordering 23. Refusing To Provide Loan Or Account Histo35. Refusing Refusing To To Or Or Not 34. UsingThe 41. Corporate Advances Advances Unto A BorrowerTsJEscrow Account. Allocations. Address. Altered Or Incomplete 29. Borrower’s Own Hazard Insurance That Meets Insurance That MeetsLenderlsJ Lender’s Requirements. 26.
17. copy 3. even even as more! Pay Pay up upor orelse! else! If you donUpay aaseries If you don’t pay exactly exactly what what they they demand. All a predator has to do is make a demand of money from you and threaten to take your home if you donU ted. times. 21. Altering. Failing to provide provide proper properbreak-out break-outof ofdebt. of predators kill their nonjudicial are permitpermitted. evidence. but afford to the foreclosure. Filing of 18. However. Filing 15.fees. held in suspense. expenses expenses and being dedemanded. BPOs and other other nonrecoverable expenses nonrecoverable expenses 20.that thatthe themost mostdangerous dangerous of predators kill theirprey. and concealing concealingevidence. Concealing various expert. 2. Cutting the law law and and legal legal requirements count if ifnobodylSJlooking nobody’s looking awaywith with it. unapplied or escrow accounts. loan loan histories histories and and evidence. Demanding principaland andinterest interest payments payments afafter note ter notehas has been been accelerated. Filing of affdavits by 12. Demanding Demanding late 4. false and reports and testimony. owe. sitions and hearings. accelerated. of fraudulent fraudulentand andfalse false affidavits by predapredatory lenders lenders claiming amounts amounts owed owed that that are are nonrecoverable from the borrower. 4. lunch.In In many many states. and other other items items being interest."Foreclosure" PREDATORY MORTGAGE . Destroying and 7. demand. Filing of affdavits by 13.the thelawyers lawyers use use a tactics to foreclose as quickly and inexpensively as possible since delays in the foreclosure process eat up the tactics to foreclose as quickly and inexpensively as possible since delays in the foreclosure process eat up the predatorTsJprofits. such cases. 19. documents and complaints. Filing of affdavits by 15. Providing Providing false and perjured perjured testimony testimony in depo21. phone and fees to to borborphone and other otherexpenses expenses and legal legal fees rowers and courts. 10. offcials. debt. illegal. It asmuch much as as$20. nonjudicial foreclosures foreclosures are stage. rowers and courts. avariety variety of of of Manytimes. records and loan histories as records and loan histories as evidence. of fraudulent fraudulentand andfalse false affidavits by predapredatory lenders claiming that tory lenders claiming that they they lost lost the note when in had control control of the document. Filing of fraudulent andfalse false affidavits by predapredatory lenders claiming an not tory lenders claiming an indebtedness indebtedness that is not owed. Concealing various expert. owed. the the predator predator will willtear teartheir theirvictims victimsapart apartby by series of of legal legal actions that that in in reality reality are areillegal. and nonotices to borrowers. process. of fraudulent fraudulentand andfalse false affidavits by predapredaclaiming control and custody of tory lenders lenders claiming custody of not in in their control documents that are are not control and and cuscustody. Some include: or they can can get away Someof ofthe thepredatory predatorymortgage mortgageforeclosure foreclosurepractices practiceswe we have have uncovered include: 1.PREDATORY MORTGAGE LENDINGLENDING .000 $20. 18. misleading and and deceiving deceiving documents. in fact they never had Filing of fraudulent and affdavits by 14. However. Providing Providing misleading 22. to identify= identify or or credit credit any anyavailable available cash cash held in suspense. unapplied or escrow accounts. nonrecoverable from the borrower. Many canTtJafford to fight fght back.InIn such cases. whiting out 1. Demanding principal 5. evidence. and expense expense fom bor8. Filing of affdavits that that claim claim 17. records. 22. payments. evidence. All a predator has to do is make a demand of money from you and threaten to take your home if you don’t pay up. Cutting corners corners or or following following the requirements don’t donUcount predator’s profits. states. most most predatory predatory mortgage mortgagelending lendingvictims victims can cannot notonly only not not afford afford to to actions pay whatlsJdemanded. foreclosure. when in fact they are only the servicer. of frivolous frivolous motions motions for for summary summary judgejudgement.fees fees and from not obligated to by the borrower. Extorting Extorting payments. Including late late fee fee payments. manded. Filing of affdavits by 16. 6. fees. 5. Predatory lenders lendershire hirepredatory predatorylaw lawfirms frms and and lawyers lawyers todo dotheir theirdirty dirty work work for them by fling Predatory to filingaabarrage barrage of legal legal maneuvers. ment.000or ora a$1 $1million million pay up. 2. rowers not borrower. lunch.com/post/documentViewer. Demanding Demanding the ofof codefendantTsJ 6. Filing of fraudulent fraudulentand andfalse false affidavits by predapredaclaiming that they they own the tory lenders lenders claiming the note note when in fact they are only the servicer. ItdoesnUmatter doesn’t matterif ifthe thepredator predatordemands demands more more than thanyou youowe. It It is at this Predatory stage.the thevictim victim can’t afford to back. Paying Paying experts experts to to provide false and fraudulent 20. Failing to 10.jdsupra. latefee fee payments payments afer afternote notehas has been been accelerated. maneuvers. 14. 8. Filing 16. false and sitions and hearings. thepayment payment codefendant’s atatfor their their torney fees fees for 7. 12. Filing 13. accelerated. Filing of fraudulent fraudulentand and false false affidavits facts not not known known by to support support knowledge knowledge of facts by the affiant. 9. payments. 0 . Altering. 11. interest. Including BPOs and 19. records. prey. Bribery of court officials. travel. but can’t canUafford to pay the lawyers lawyers to to fight fight the pay what’s demanded. Failing to 9.“Foreclosure” Predatory Mortgage Foreclosure Foreclosure Predatory Mortgage Document hosted at http://www. 3. redacting redacting and whiting out documents. Failing to provide proper proper notifications notifcations and 11. documents. borrowers. copy.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Predatory Mortgage Mortgage Foreclosure Foreclosureis isthe thelast laststop stopin inthe the predatory predatory mortgage mortgagelending lending process. documents and complaints. travel. it.
25. and 32. Securing deeds-in-lieu of foreclosure by trickery. Criminal Criminaltrespass trespass and theft ofproperty property homes by investigatorsand and agentsof ofmortgage mortgageservicers servicers and and their attorneys litigating claims and foreclosures against customers. Hacking Hacking into intothe thecomputers computersof oflitigants litigantsand andcitizen citizen groups.`¦ ¦ Flu. credit. Supporting Supporting motions motions for for summary summary judgement judgement with withfraudulent fraudulentand andfalse false affidavits. i 1.jdsupra.“Foreclosure” Further Predatory Further PredatoryMortgage MortgageForeclosure Foreclosure Abuses Abuses Document hosted at http://www. fraud and 24. 28 . Using corporate dummies as corporate reps that are trained to avoid questioning and obstruct Using corporate dummies as reps that are trained to obstruct justice. fraud and deception. Invasion of of privacy privacy by by hiring hiringoutside outsideinvestigators investigatorsto toillegally illegallyobtain obtainpersonal. 26. and conflict of interest. 28. Securing deeds-in-lieu of foreclosure by trickery. Having Having parent parent companies companies or or other other subsidiaries subsidiaries retain the law frms firmshired hiredby byconsumer consumerso soas as to tocreate create a conflict of interest. information on family members of complaining customers and potential witnesses.PREDATORY MORTGAGE LENDINGLENDING . 27. Invasion 28. justice. thef of inin homes by investigators agents 29. counsel.Ii _i. deception. their attorneys litigating claims and foreclosures against customers. 31. personal. Tortuously Tortuously interfering interferingwith withthe therepresentation representation of oflitigants litigantsand andtheir theircounsel.credit."Foreclosure" PREDATORY MORTGAGE .medical medicaland andbusiness business information on family members of complaining customers and potential witnesses. 1_Ii . affdavits.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Additional mortgage foreclosure abuses Additionalpredatory predatory mortgage foreclosure abusesand andillegal illegalactivities activitieswe wehave have discovered discovered include: 23. Witness Witness tampering. Refusing Refusing to to produce produce documents documents ordered ordered to to be be produced. 30. tampering.com/post/documentViewer. 24. groups.
account. Laws.escrow escrowfor forwrongfully wrongfully forced insurance and and refusal refusal to to credit credit amounts of escrow escrow deposits forced place place insurance the previous charges demands for payment when all and/orportions portions of of those those payments payments the previous yearlsJescrow year’s escrow charges inin demands for payment when all and/or were included as part of escrow shortage calculations in subsequent yearlSJescrow analysesTi nd paypaywere included as part of escrow shortage calculations in subsequent year’s escrow analyses’ and ment demands. Violation of RESPA in changing the terms and conditions of a customerlJnote when assigned Violation of RESPA in changing the terms and conditions of a customer’s note when assigned or purchased. regulations. within60 60 days days after complaint. of credit credit and and wrongful foreclosure of homes. including. laws. Misstating. Violation Violationof ofState State & &Federal Federal RICO RICOacts. negative credit credit reporting reporting for 60 days upon written written disputes. and (b) (b) (c) (c) within afer complaint. taxes. errors. ruin of wrongful foreclosure of Abusive collection of intimidation. Violations Title 12 Violations of ofvarious various state state and and federal federal Title 12 banking banking laws laws and and regulations. Violation of HOEPA. Violation Violationof ofvarious variousstate state collection. Violation limitation ofof escrow cushion by demanding more than aayearlsJworth of Violationof ofRESPAk2 RESPA’s 2month month limitation escrow cushion by demanding more than year’s worth of escrow for for wrongfully wrongfully forced place that was represented aa customer’s escrow forced placeinsurance insurance that was representedas asbeing beingcredited creditedto tothe the customerlSJ account but afer the credit. Failure to stop negative days upon disputes. Misleading to escrow escrow activity activity and and payments payments in in their Misstating. regulations and procedures. they have Federal and State laws as well as RESPA and HUD policies. Violation of the 20/60 by failing toto acknowledge investigate written Violation of the 20/60rule rule by failing acknowledgeand and investigatecustomerlsJcontinual customer’s continual written demands within within 20 complaints and demands 20 days days of notice to to the the lender. save have been beenfound found to to violate violate the the following following lations. revenue. (d) (d) (e) (e) (f) (f) (g) (g) (h) (h) (i) (i) (j) (j) (k) (k) (1) (l) (m) (m) (n) (n) (o) (o) (p) (p) A . errors. homes. including.jdsupra. Misleading customers customers as as to their escrow escrow account. acts.com/post/documentViewer. purchased.statutes statutes and and reguregu- lations. Laws. account but was was still still be be demanded demanded in in payment paymentdemands demands over over a a year year after therepresented represented credit. Failure to properly notify notifycustomers customers of of escrow escrow activity in in their theirescrow escrow account. Violation of escrow lawfully allowed Violationof ofRESPAk2 RESPA’s 2 month monthlimitation limitation of escrowcushion cushionby by demanding demanding more more than lawfully allowed amounts of deposits for for taxes. customer’s debts.PREDATOR'S ILLEGAL ACTIVITIES & NONCOMPLIANCE PREDATOR’S ILLEGAL ACTIVITIES & NONCOMPLIANCE PredatorZJlllegal Activity& & Noncompliance Noncompliance Actions Predator’s Illegal Activity Document hosted at http://www. but limited limited to: to: (a) (a) Violation rule and aafailure and misapplications misapplications Violationof ofthe the20/60 20/60 rule and failureto tocorrect correctmortgage mortgagediscrepancies. regulations and procedures. Mischaracterizing Mischaracterizing and and misrepresenting misrepresenting the amount amount of ofpayments payments due due the the servicer servicer or bank and the the status status of ofcustomerlSJdebts.consumer consumerprotection protectionand anddeceptive deceptivetrade tradepractice practice laws. account.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Many violate to comply with various Federal and State Many predators predators willfully willfully violateand andfail fail to comply with various Federal and Statelaws. demands. but not not Federal and State laws as well as RESPA and HUD policies. laws. Violation calculating escrow Violationof ofRESPAkguidelines RESPA’s guidelinesin in calculating escrowpayments payments and and demands. In Inorder orderto to save money money and and earn earn additional additional revenue. collection. Fair Credit Act & DebtCollection CollectionLaws. Violation of Truth & Debt Violation of Truth In InLending LendingLaws. Abusive collection practices practicesthrough throughthreats threats of intimidation. ment demands. discrepancies.
investors.civic civicorganizations organizationsand andCongress Congress have focused their attentionon onpredatory predatory lending lending and agencies. Impairment customer’s physical and and mental mental health. expenses. actions. expenses. interest rates rise and and calls calls are are made made on on credit credit enhancement rise enhancement guarantees.family familyestrangement. Effects Effects on onspecifc specificsegsegments of their constituencies are as follows: ments of their constituencies are as follows: Effects On On Financial Markets Effects The Wall The efects effects of of Predatory Predatory Lenders Lenders who who are are Wall Street Investment Investment Banks Banks on on financial financial markets markets include: include: Street 1. ignorance. and notes. Illegal Illegal stripping stripping of 1. abuses.EFFECTS & CONSEQUENCES OF PREDATORY LENDING EFFECTS & CONSEQUENCES OF PREDATORY LENDING Effects Of Of Predatory Predatory Lending Lending On On Public & & Key Effects Key Constituencies Constituencies Document hosted at http://www. Reluctanceof of corporations. Impairment ofof customerlSJphysical 4. advances. Emotional and mental abuse and inficted 3. but their shareholders and investors as well.regulators. Retaliation upon those who discoverabuses. 3. regulators. damages 7. 8. 2. Overpayment Overpayment of fees. predators predators should should get get the the mesmessage to not only protect the consumer. 8. ofnon-obligated non-obligated fees. estrangement. 6. Emotional and mental abuse and distress distress inflicted upon customers. and payments by customers. Effects On On Customers Of Of Predatory Effects Predatory Lenders Lenders The The efects effects of of predatory predatory lending lending actions actions on a a predatorlsJborrowers include: predator’s borrowers include: 1. 9. borrower. shareholders. guarantees. Economic Economic damages suffered suffered by customers customers for intentional intentionaland and wrongful wrongfulreporting reportingof ofcredit. 5. investors. customer’s homes. The OfOf Predatory Predatory Lenders Has An Impact And And The Actions Actions Lenders Has An Impact AffectOn On The Public. Shareholders & Affect The Public. onment of customers customers and their family members. Failure Failure of of major banks banks and andWall WallStreet Street frms if if 2. 4. Increased stomerk mortgages 9. Jane Janeor orJohn JohnDoe Doe or or Smith. light of ofrecent recent litigation. Recently. quently referred to to as as “smucks” instead of The efects of a predatorlJbehavior has a wide range effect on many. 3. predatory. mutual mutual funds funds and 3. abused. government government and the public. not just justthe theborrowers borrowersbeing beingabused. noncompliance of and abuse of the the servicing practices. predatory predatory lenders lenders and and financiers fnanciers should actively work work to predatory lending lending firms and banks banks have taken. Infliction Infliction emotional duress. corporations. tocease cease predatory practices. Financial Markets. noncompliance of and abuse of law when customers arefrefelaw is is startling! startling! This Thisarrogance arroganceis isrefected reflectedone onecompanylsJown company’s own foreclosure foreclosure manuals manuals when customers are quently referred C mucksUinstead of borrower. Illegal foreclosure 2. supervision. Reluctance and other investors investors to invest in legitimate legitimate mortgage mortgage securitiesthat that are arenot not predatory. firms value of derivative products falls. Federal and state agencies. and impris10. Divorce. a predator’s arrogance. 4. ofof emotional duress.expenses. Increased 4. upon customers. This Thisincludes includesthe thepredatorlSJown predator’s own shareholders. the the effects effectsof ofpredatory predatorylenders lenders and fnanciersaffect afectmany manydirect direct and andindirect indirect constituconstituAs exhibited and financiers encies.public public andregulatory regulatoryinvestigations investigationsand andthe thehits hitsand andshots shots that that Wall Wall Street Street firms and taken. a predatorlSJarrogance. 2. Shareholders & Employees AsWell Well As Borrowers Employees As As Borrowers 30 . but their shareholders and investors as well. Recently Federal and state sage to not only protect the consumer.com/post/documentViewer. below. Financial Markets. have focused their attention servicing practices. of various various mortgage derivative products due due to to increased liabilities caused by predapredaucts increased liabilities caused by tory lending practices. health. Divorce. Illegal foreclosureand andloss loss of of customerlJhomes. practices. In lght of such focus. and payments by customers. and backed securities Increasedgovernment government regulation regulation & & supervision. Increasedpayoffs payoffsof ofcu customer’s mortgages and and notes. death death and imprisonment of family members. Retaliation upon those who discover 6. In In light and encies. Smith.loss loss of property legal of propertyand andpayment paymentof of legalexpenses. advances. In light of such focus. litigation. not The effects of a predator’s behavior has a wide range effect on many. tory lending practices. customer’s homes.jdsupra. Devaluing Devaluing of 1. In In light lightof ofcongressional congressional action action and and new new legislation legislationand andregulatory regulatoryactions. interest rates value of derivative products falls.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 As exhibited below. ignorance. credit. of equity equity of ofcustomerlJhomes.
legal legal expenses expenses and liabilities liabilitiescaused caused by bythe theservicerlSTdirect servicer’s direct actions and fraud. 2. by courts.com/post/documentViewer. 8. customer’s mortgage. them due to their predatory lending practices.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 The investors The efects effects of of a a predatorkpredatory predator’s predatorylending lendingactions actions upon uponinstitutional institutional investorsand andtrustees trustees related related to their various include: their various mortgage mortgage backed backed securities securities include: 1. SEC SEC or or other other government government agencies that sales of securities were not “true ()rue agencies that sales of securities were not saleslas representedto to investors. Reduced value of market securities agencies downgrade downgrade ratings. Reduced securities if rating agencies agencies downgrade ratings or or securities securities impaired impaired by by legal legal or or regulatory regulatorydecisions. of “servicing fee” payments by predatorlsJmanipuments by investors. Loss of by bankruptcy courts courts and regulatory regulatory rulings rulings of opinions or and of legal legal opinions or State State AGs. and 2. Loss 10. practices. agencies. 4. of securities if cuscustomers exert rights to prevent foreclosure or tomers exert rights to prevent foreclosure or dedeon the the “alleged” QlegedTloss fault based based on loss of promissory promissory notes. the the SEC SEC and and sales” as represented security credit credit rating ratingagencies. Increased Increasedprincipal principal payments payments and and payoffs payofs by 7. 6. Decreased 9. beneft. A 5. Decreasedpayments paymentsand andvalue value of securities if 9. Increased liability customers where been customers where investors investors or or trustees trustees have have been assigned an an interest interest in assigned insuch suchcustomerlSTmortgage. Increased Increasedand andoverpayment overpayment of ( rvicing fec6pay11. investors. decisions. cies 14. Payment of advances for fees. deeds deeds of of trusts trusts and and mortgages mortgages supposedly supposedly notes. practices. AGs. An An outcry outcry from fromshareholders shareholders and and constituents constituents regarding the the support support and and financing fnancing of regarding of predapredatory lending tory lendingpractices. 11. of securities if cuscustomers exert rights to prevent foreclosure or tomers exert rights to prevent foreclosure or dedeon the loss fault based based on loss of loan and and transaction transaction histories by by the the predator predator or orprevious previousservicers. held or or owned owned by by the the predator. 3. Reduced value of market securitiesif ifrating rating agen13. Reduced marketability marketability of market securities if 14. A credit credit downgrading downgradingof ofmortgage mortgagebacked backed securisecurities marketed marketedby byWall Wil Street by ties Street frms firmsand andserviced serviced by than due to their predatory lending practices. of interest interestin in real realestate estate by bankruptcy 10. 37 . Payment of advances for fees. 3. Decreased Decreasedpayments paymentsand andvalue value of securities if 8. legal legal expenses expenses and liabilities liabilities actually actually collected collected by the predator for its own benefit. 5. predator. servicers. Payment and 6. fees. investors. courts. Ruling by 12. Paymentof ofadvances advances for forfees. due due to to a a predator’s manipulation lation of of customerkprincipal customer’s principalbalances balances and and failin a ure to to properly properlycredit creditcustomerlSTaccounts customer’s accounts in timely manner.jdsupra. timely manner. by cuscustomerswhodonl vant to dobusinesswith tomers who don’t want to do business withthe thepredapredator because of its abusive servicing tor because of its abusive servicing practices. A 4. Increased liability if named in lawsuits by their 1. 12.EFFECTS & CONSEQUENCES OF PREDATORY LENDING EFFECTS & CONSEQUENCES OF PREDATORY LENDING On PredatorlTlnvestors & Trustees Effects On Predator’s Investors & Trustees Document hosted at http://www. A credit credit downgrading downgradingof ofmortgage mortgagebacked backedsecusecumarketed by by predatory predatory lenders lendersor or finanfnanrities marketed ciers and and serviced servicedby byaffiliates affliates due due their their fraudufrauduciers lent lent accounting accounting methods. 7. 13.
Refusal Refusalof ofvarious variouscorporations corporations to todo dobusiness business with with a a predator predator due to their predatory predatory lending practices. scandals. due to a 10. 3. sanctions. tion due to unnecessary operational risks. practices. press. prices due due to toadverse adverse legal and regulatory regulatory decisions. 4. Increased 3. phone numbers ily ily members members who who are are directly directly responsible responsible for predatory actions actions and and decisions decisions in in the thepress. 2. Reducedstock stock and and option optionprices prices upon upon news news of adverselegal legaland andregulatory regulatory investigations. Reduced Reducedstock stock and and option optionprices prices upon upon news news of court award court award of ofdamages. returns and dividends. companies 8. issues. culture. including includingshares shares held held by by employees.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Predatory lenders. phone numbers and and famfamtheir home addresses. fnes finesor oremployment employment and and even even imprisonment supporting illegal. fnes and sanctions or sulting from jury awards. 2. assessassessments and and decisions decisions withaareduction reductionto toprofit proft ments with thereby reducing shareholder value. criminal or ethical practices. and reguregulatory latoryissues. fines and sanctions or elimination of to regulatory regulatory or or court court elimination ofdivisions divisions due due to pressures. financiers and their theirshareholders. 8. Loss Loss in instock. regulation and sanctions. Increased exposure regulation and oversight. fines fines and and sanctions. of jobs jobs due due to to cuts cuts and layofs layoffs reresulting from jury awards. 32 . employees.EFFECTS OF PREDATORY LENDING LENDING ON SHAREHOLDERS EFFECTS OF PREDATORY ON SHAREHOLDERS Effects On On Predators Predators Stockholders Stockholders& & Company Effects Document hosted at http://www.com/post/documentViewer. criminal or ununment to those supporting illegal. managers and executives who do do fied f employees. Public Public publicationand andexposure exposure of individuals their home addresses. Increased management and executive executive focus and time addressing legal. 2. Increasedpublic publicscrutiny scrutinyby bythe themedia. practices. Loss of business companies governmentsnot not willing willing to conduct and governments conduct business with with supporters ness supporters of or or predatory predatory lenders lenders themselves. noncompliance noncompliance and time addressing legal. shareholders. 6. legal and decisions. sanctions. Reduced of 4. Predator’s Executives. Public Public andprivate privatehumiliation humiliation and embarrassment to those supporting illegal. On A Partners & & Employees Effects On A PredatorZJExecutives. publication 4. Criminal regulatory prosecution of executives. A devaluation devaluation of any any goodwill taken taken due companykinvolvement company’s involvement in in predatory predatory lending. Elimination Elimination of 1. 6. themselves. Refusal Refusalof ofvarious various communities like Chicago to do business with the the predator predator or or its its affiliates affliates due due do business with to their their predatory predatorypractices. Difficulty Diffculty recruiting. media. communities.and and reguregulatory andofficials offcials of of other latory agencies agencies and other activities. returns and thereby reducing shareholder value. 11. Negative press pressand andmedia mediareports reportsand and harm harm to 9. Partners A executives. investigations. pressures. practices. endorsed or participated unwittingly supported. Increase Increasein inlegal legalexpenses expenses and and fees fees to corporacorporation due to unnecessary operational risks. illegal. 7. stock. Reduced stock and option option prices 1. damages. Such efects can include: Such effects can include: 1.jdsupra. managers and executives who with the company or not want want to tobe be associated associated with its its culture. can be in various ways ways including: including: affected in 1. 10.hiring hiringand andretaining retaining qualii ed employees. predator. crimicrimiimprisonmentto tothose those supporting nal or nal or unethical unethicalpractices. Criminal oror regulatory prosecution of executives. 9. media and internet. Loss of businessfrom from communities. be directly actions. Increased exposureto toliabilities liabilities and and government government 12. recruiting. endorsed or participated in in any any of of the thefraudulent fraudulentschemes schemes employed employed by the predator. activities. Increased 7. 3.partners partnersor or employees employeescan canalso also be directlyaffected affectedby bytheir their predatory predatory lending A predatorU predator’s executives. the companylSJimage and reputation from the the company’s image and reputation from the publication publicationand andexposure exposureof ofrepeated repeatedscandals. 12. adverse of 5. ethical practices. employeeswho who have haveknowingly knowingly or partners and employees unwittingly supported. 11. and and embarrass5.
expenses expensesand andmanpower manpower taken taken by gov8. 4. assistance. of 3. investigate and prosecute to examine.FHA FHA and HUD HUD to as tothe thepredators. investigate and prosecute predatory predatory lending lending operations. foreclosures. Costs.com/post/documentViewer. operations. They They Local. financial aidand andliving livingassistance assistance due i due to a fnancial aid predatorTsJabu predator’s abuses. Loss Lossof oftax taxrevenue revenue and and income income from fromtaxpayers taxpayers are forced bankruptcy due due to a a who are forced to to file bankruptcy predatorlSJillegal or overstated demands and predator’s illegal or overstated demands and foreforeclosures. of false false and fraudulent claims by federal government and mortgage insurers federal government and mortgage insurers such such asVA. 0 . 5. 8. 6. local. in communities 7. ses. living forced to seek taxpayer support. state state and not immune are affected afected in the are the following followingways: ways: 1. Increase Increasein invandalism vandalism to to homes homes in acrossAmerica America due due to to predatory practices across practices and wrongful foreclosures. actions. wrongful foreclosures.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 Local. Support and taxesexhausted exhausted by by local. & Federal Effects On Local. VA.jdsupra. predators. Increased Increasedtaxpayer taxpayerexpense expense in in use use and and abuse abuse of to defend or prosecute predatorlJ court systems systems to prosecute predator’s illegal illegal actions. Overpayment of fraudulent claims 1. predators. closures. living assistance. Costs. Support and taxes and 4. state state and federal government government for for individuals who federal who are are forced to seek taxpayer support. government to examine. State State & Federal Governments Document hosted at http://www.EFFECTS OF OF PREDATORY LENDING LENDING ON GOVERNMENT EFFECTS PREDATORY ON GOVERNMENT On Local. lending. Increase in inabandoned abandoned homes homes in communities acrossAmerica America due due to to predatory across predatory practices practices and wrongful wrongfulforeclosures. Overpayment Overpaymentof of falseand and fraudulent fraudulent claims claims by GSEIJsuch as Fannie Mae and Freddie Mac to to GSE’s such as Fannie Mae and Freddie Mac the predators. false 2. andfederal federalgovernments governmentsare are not immune from from the the effects effectsof ofpredatory predatorymortgage mortgagelending. Increase in communities 6.
the more of these factors that exist. 9. You were charged at closing. loan. 14. increases the risk for victim. 2. If If you you don’ donLdo it yourself. assigned or transferred. or 15. You haverefinanced refinancedyour your home home loan loan more more than than 20.PREDATORY LENDING RISK FACTORS PREDATORY LENDING RISK FACTORS Risk Factors For Mortgage Abuse Abuse Risk Factors For Predatory PredatoryLending Lending & & Mortgage Document hosted at http://www. 7. quarterly basis. You missed or mortgage company. 5. home. You You were sold insurance at the inception of tion of your your loan.jdsupra. You QnterestUrate 1. history. 17. feature. You have have or or had poor credit 11. You havebeen beenthreatened threatenedby byyour yourbank bankor ormortmort19. the more of these factors that exist. Your 5. You missed one oneor or more more payments payments to to your your bank 12. history. attorney Examine do it yourself. You have a a loan loan that was securedfor for you you by a 21. You have gage company with with foreclosure. 6. increases the risk for predatory predatory mortgage mortgage lending lendingabuses. (ARM). loan.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 area anumber numberof of“risk ask factorsUwe haveidentified identifed that are are common common in in predatory lending and mortmortBelow are factors” we have gage abuses cases. credit your payment. abuses. Your loan loan or or its its servicing servicing rights rightshave have been been sold. once in a given year. You have signed overyour your deed deedto to a a bank bank or or 23. 3. during the history of your loan. erty. 11. 13. Your 8. during the history of your loan. (PM]). sold credit credit life insurance 22. Your prepay2. gage company foreclosure. ¦ 7 1A 1. One ortwo twoisolated isolatedrisk riskfactors factorsin in and and of of themselves themselvesdon’t donUnecessarily meanyou’ve youe been gage abuses cases. You have signed over mortgage company. credit when when you yousecured secured your loan. or mortgage company. closing. loan.com/post/documentViewer. Your bank 16. Your mortgage mortgage or promissory promissory note note has has an an arbitration clause. Your mortgage or promissory note has aC “negaiegative amortizationUclause. Examine your your loan loan documents documents and and get get a aloan loanhistory. 23. You have gone through bankruptcy during the 18. haveaaqualified qualifed attorney. assigned or transferred. Your mortgage or promissory note has a 4. However. 10. You have have paid for private private mortgage mortgage insurance insurance (PMI). property taxes taxes and/or insurance. 19. 18. 16. You have gone through bankruptcy during the history of of your your mortgage mortgage loan. ment penalty. Your bank or 13. You charged more more than than 4 points at 3. You pay own insurance insurance premiums a quarterly basis. have legal aid society society or or local local housing housing counselor counselorreview reviewyour your loan loan documents documents and and its its history. sold. You have made made principal principal prepayments prepayments to to your 9. You have account. You have have an adjustable “interest” rate mortgage (ARM). You have or impound property and/or insurance. You haveor orhad hadescrow escrow or impound account account for for 6. 20. 4. tive amortization” clause. You pay your own premiums on a 15. You paid for 10. Your mortgage mortgage or or promissory promissorynote notehas has a a prepayment penalty. One or necessarily mean been a a victim. You signed“blank” ®lankUloan 17. You a payment payment at at a a branch branch office office of of your 14. Risk legal aid Risk factors factors include: include: 1. You signed loan applications applications and docuwith your ments with your bank bank or or mortgage mortgage company. Your bank or or mortgage mortgage company companyever everacceleraccelerforeclosed on on your your propated your mortgage or foreclosed erty. account. 8. 12. You have was secured a building contractor building contractor doing doing work work on on your your home. 21. tration clause. 34 . You made a bank or mortgage company. Your loan has a “balloon” payment feature. You have once in a given year. or mortgage mortgage company company didnTtJtimely didn’t timely credit your payment. However. Your loan has a ®alloonTpayment 7.
bank or or mortgage mortgage company companyrefuses refuses to to acaccept payments you make. Your mortgage mortgage account. 0 . account. 22. You letters. One may mean you’ve been a victim. are You see an amount for Quspens&or QnappliedU 10. for a 16. banknotifies notifes you youof ofan an“misc. failed to 21. home address. Your bank or 19. Your bank to your account. The in your your regulation regulation Z Z disclo1. 4. Oneor ortwo two isolated isolatedoccurrences occurrencesin inand andof ofthemselves themselves maynot notnecessarily necessarily mean youe mortgage abuses abuses cases. 2. to you. Your 20. records. The year-to-date account balance information on your your loan loan histories histories or orstatements statements exactly exactly match the life-to-date account balances on any any match the life-to-date account balances on year year of your loan loan except except the the first firstyear. Your bank or mortgage company canUproduce 18. 11. 26. balances. fee. has has been been charged an appraisal.adjustment” adjustment) 14. you attorney fees.demands demandsor or monthly monthly pay8. 20. You are on a (ill and receiptlTmonthly 4. 17. You receive receive letters.WARNING SIGNS OF PREDATORY LENDING ABUSE WARNING SIGNS OF PREDATORY LENDING ABUSE Warning Signs For Predatory Predatory Lending Lending & & Mortgage Warning Mortgage Abuse Abuse Document hosted at http://www. If you notice been a victim. Your 28. You don’t receive your payment coucoupon pon on on a a timely timelybasis.aspx?fid=197d1b59-e33e-47e0-92b0-d61992e9ed22 areaanumber numberof of “warning (earning signs” signslwe identifed that Below are we have have identified that are are common in in predatory predatory lending and cases. contact your complaints are not not ignorant of your complaints and and send send the the mortgage mortgage company a a copy of this this report report and and say say you are of predapredatory lending andyour your rights. Your bank bank or or mortgage mortgage company companysays says you owe owe payment for insurance an escrow escrow or advance advance payment insurance when when you you have have paid your insurance insurance directly. Your Your bank bank or or mortgage mortgage company companysays says you owe owe payment for taxes an escrow escrow or advance advance payment taxes when you have have paid your taxes taxes directly. 14. The year-to-date account balance information 3. 19. to your 15. these are more than “risk factors” these are actual frauds and abuses. Your bank bank or or mortgage mortgage company company has has charged charged you attorney fees. note. Your hank bank or or mortgage mortgage company companyrefuses refuses to to send send monthly payment statements to your home monthly payment statements to your home adaddressif ifthe theproperty property address addressis is differentthan than your your dress different home address. However. BPO or inspection fee. attorney state stateattorney attorney general. escrow monthly payments. “deed in lieu of foreclosure” offer. account. closing. documents. 17. You have been charged 7. You see an amount for “suspense” or “unapplied” transactions on on your statement or loan history.com/post/documentViewer. You are on a “bill and receipt” monthly payment payment coupon system. The year-end principal balance on your your loan 2. The year-end principal balance on loan hishisdonUmatch tories or statements statements don’t match the beginning year principal principal balance of the year balance of the next next year. 12. promissory promissory notes notes or deeds deeds of pay off of your trust when you pay yourloan loan or orare are foreforeupon. Your Your bank bank or or mortgage mortgage company company has has failed on-time. 3. 6. 7.jdsupra. 18. make. Your bank or or mortgage mortgage company company canUanswer can’t answer your questions escrow your questions about about your yourloan loanbalances. transactions You see obvious alterationsor or typed typed over over figures fgures 11. or mortgage mortgage company companycanltJaccount can’t account to you or provide you with evidence of payments payments to you or provide you with evidence of made on your account. you paid your directly. closed upon. 27. You see to are not not familiar familiar with. these are more than Qisk factorsUthese are actual frauds and abuses. Your bank or mortgage company makes you a deed in foreclosurelofer. statements statements or histories histories sent sent to you. You don’t receive your payment coucoupon at all. Warning tory lending schemes schemes and Warning signs signs include: include: 1. If you notice two of contact an an attorney. or mortgage mortgage company company changes changes the terms or amount of payment before terms or amount of payment before closing. You have been charged a a late late fee. 13. 23. Your 26. Your bank bank has has ordered home or property. 8. The amounts amounts listed listed in disclosure statements differ than the amount listed in sure statements differ than the amount listed in your mortgage mortgage or promissory promissory note. account. charged an appraisal. 5. account or monthly payments. coupon system. Your bank bank or or mortgage mortgage company companycanltJaccount can’t account to you for a payment. closing. However. after afer closing. (hisc. Your ordered hazard hazard insurance insurance on on your your 12. You donUreceive your monthly monthly payment 6. can’t produce loan of loan documents. rights. 24. tially in one year. You see obvious alterations on any any loan loan records. 9. Your monthly 27. Your bank or 16. You donUreceive your monthly monthly payment 5. 25. payment coupons that contradict each other. Your 24. BPO or inspection fee. ment that contradict each other. pon at all. 10. You seeaafee feecharged charged toyour youraccount account that that you 9. year. year. Your bank notifes you 6scrow adjustment” adj ustmentT 13. 28. general. monthlyescrow escrow payment payment jumps jumps substansubstantially in one year. Your 15.banking bankingregulator regulatoror orthe theFTC FTC with with more than one or two of these. Your bank or mortgage company makes you a 22. property. Your bank 23. basis. these. Your bank notifies you of of an an “escrow to your your account. account. pay your property property taxes taxes or insurance on-time.
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