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18 posts from March 2008

March 30, 2008

Understanding and Reporting Suspected Predatory Lending Fraud

Real_estate_fraud

How has the Subprime Crisis affected you? 

  • Foreclosure?
  • Victim of Real Estate Fraud?
  • Skyrocketing mortgage payments?
  • Negative credit rating?
  • Victim of Predatory Lending?
  • Misled by lenders?

Call or e-mail me to learn about your legal rights.  Maybe all is not yet lost...

Lowell Steiger, Attorney at Law (323) 852-1100

lowell@steigerlaw.com

As we learn more and more about predatory lending and the subprime mortgage crisis, I think it is imperative that you read the following article written by the Mortgage Bankers Association (MBA). 

Understanding and Reporting Suspected Predatory Lending and Fraud

MBA and its members actively fight against predatory lending. Lending practices that strip equity away from homeowners or place them in financial hardship are considered abusive and predatory. Avoid becoming a victim by learning how to identify the types of abusive lending practices, scams or other questionable business practices that predatory lenders use.

The questions below provide a means for you to determine whether someone could be misleading you about a loan and its costs to you. Questions 1 and 2 relate to mortgage fraud, while questions 3-10 are associated with predatory lending. Answering "yes" to any of the questions does not mean you are or have been a victim of fraud or predatory lending.

However, if you do answer "yes" to some of the questions, we recommend you contact the appropriate agency or agencies (see Have a Complaint?) to guide you. In addition, local law schools often have helpful clinics and may be able to provide legal assistance if needed.

MBA also has developed a Borrower's Bill of Rights that is designed to help borrowers understand how they should expect to be treated in the mortgage lending process. Click the link to the right to read this guide. You may want to print it out for reference.

Fraud-related issues

1. Were you encouraged to include false information on your loan application?

2. Were you asked to leave signature lines or any other important line-item of any form blank? Did the lender or broker alter any information you entered on your loan application?

Predatory lending indicators

3. Check your loan file. Are any of the following disclosures missing?

4. Have you refinanced your loan several times and in each instance either your monthly payment and/or the total amount you owe on your home increased?

5. Do your documents reveal that your interest rate calculation will change to require you to pay "daily interest" in instances when your payments are late? Are there any pre-payment penalties if you want to pay off or refinance your loan (see article at http://www.freddiemac.com/singlefamily/pdf/ppm.pdf)?

6. Is your loan amount higher than the value of the home?

7. Did you incur any unexpected costs at settlement that were not explained to you prior to the settlement?

8. After settlement, were you surprised to find that the monthly payments on your mortgage loan were higher than you anticipated based on the initial disclosures?

9. If you have a balloon loan (one in which after a series of low payments the entire loan balance is due in a large lump sum), will you need to obtain another loan to finance that final lump-sum amount?

10. Were you required to buy credit insurance, insurance that will repay the debt if you die or become disabled? (Note: Credit insurance is optional and will not affect your loan decision if you decline to buy it. It can, however, add considerable cost to the loan transaction. You should decide carefully whether you are going to purchase credit insurance. See article at http://www.bankrate.com/brm/news/mtg/20010726a.asp).

Federal laws
These are the most important federal laws that protect your rights during the closing process:

Real Estate Settlement and Procedures Act (RESPA) GO »
RESPA requires that consumers receive disclosures at various times in the mortgage processing transaction and outlaws kickbacks that increase the cost of settlement services. RESPA is a HUD consumer protection statute designed to help homebuyers be better shoppers in the home buying process, and it is enforced by HUD.

Truth in Lending Act (TILA) GO »
The Consumer Credit Protection Act of 1968 launched Truth in Lending disclosures. For the first time creditors had to state the cost of borrowing in a common language so that you—the consumer—could figure out what the charges are, compare costs, and shop for the best credit deal.

State laws
Other laws in your state may be in force to protect you from abusive lending practices such as excessive high fees and high rates, given your credit profile. High fees include charges for items such as pre-payment penalties and credit life insurance.

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How has the Subprime Crisis affected you? 

  • Foreclosure?
  • Victim of Real Estate Fraud? 
  • Skyrocketing mortgage payments?
  • Negative credit rating?
  • Victim of Predatory Lending? 
  • Misled by lenders?

Call or e-mail me to learn about your legal rights.  Maybe all is not yet lost...

Lowell Steiger, Attorney at Law (323) 852-1100

lowell@steigerlaw.com

March 29, 2008

Texting While Driving: Graphic Horror Photos

Please view the photo album with caution.Binder1_page_1_3  The photos in this posting are not for the faint-at-heart.  For that reason, I am posting only one picture here and you'll have to click here to see the rest.  Please show these pictures to your kids and tell them in simple, emphatic words, don't text while driving.  Texting while driving could lead to death, or worse.

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Update: 2009 Law Bans Text Messaging while Driving - See Video

The Law Office of Lowell Steiger Represents Injured Victims

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Update 2011 -Texting While Driving Kills

 

 

 

 

If you have suffered a Personal Injury, Call for a Free Consultation

 

Contact Attorney Lowell Steiger at (323) 852-1100

 

 

 

 

 

 

 

or via e-mail at lowell@steigerlaw.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"Treated With the Respect That You Deserve"

 

www.steigerlaw.com

 

March 27, 2008

Speed Trap Exchange

Speed_trap_exchange The SpeedTrap Exchange is a site where visitors can post what they believe are speedtraps. The National Motorists Association cannot attest to the validity of these listings. They are individual postings from private individuals who believe a speed trap is in effect in these locations.  This site is chock full of valuable information and links including Speedtrap Listings, Speed Limits: Fact & Fiction and How to Fight a Speeding Ticket.

The best way to avoid a speed trap? Don't Speed!!!

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The Law Office of Lowell Steiger Represents Injured Victims

If you have suffered a Personal Injury, Call for a Free Consultation

Contact Attorney Lowell Steiger at (323) 852-1100

or via e-mail at lowell@steigerlaw.com

"Treated With the Respect That You Deserve"

www.steigerlaw.com

March 25, 2008

Top 10 Reasons for Failing the Driving Test: DMV Video #10

An excellent video series, produced by the California Department of Motor Vehicles, which explains the 10 Reasons for Failing the Driving Test.  Many of the cmmon mistakes that lead to failure of the test are the same mistakes that cause injury related accidents -- something that we should all try to avoid!  To see the rest of this series, and other DMV videos, click here.

Another fascinating video is the DMV Video entitled "Kyle's Test Drive."

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The Law Office of Lowell Steiger Represents Injured Victims

If you have suffered a Personal Injury, Call for a Free Consultation

Contact Attorney Lowell Steiger at (323) 852-1100

or via e-mail at lowell@steigerlaw.com

"Treated With the Respect That You Deserve"

www.steigerlaw.com

Speeding Tickets: Practical Tips and Advice

Radar_gun

Advice on Speeding Tickets

Good advice:  don’t speed
Best advice:  FIGHT IT!

We’re at a time where speed enforcement is more vigilant than ever, yet we’re also taunted with the availability of faster and faster cars. Horsepower comes cheap these days, with even minivans having 250 horses. The National Highway Traffic Safety Administration cites speeding as the factor in 1/3 of all crash-related fatalities. With federal officials are urging states to increase speed enforcement, causing lawmakers in California to have added surcharges of as much as $30 on top of fines for speeding.

Paying the fine might not change your life, but the fine is usually the least of your worries. Even one speeding ticket can cost you thousands of dollars in higher insurance premiums. Insurance companies punish speeders, often basing their beliefs on studies such as one which shows California drivers with one speeding citation in a three-year period had a crash rate 50% higher, on average, than those with no infractions – and the crash rate more than doubled for those who had two or more tickets, according to the insurance Institute for Highway Safety and the Highway Loss Data Institute.

There’s evidence that getting a ticket does seem to slow people down, at least for a while. A study published in the British medical journal the Lancet, found that a conviction for a moving violation cut the risk of a fatal crash in the following months by 35%. The benefit evaporated by four months after the conviction. Assigning penalty points to a driver’s license – especially for speeding tickets – reduced the risk of fatal crashes more than convictions without penalty points.

Here’s the reality – speeding is

America

’s favorite pastime, isn’t it. it is simply avoidable, and possibly irresistible. And there are ways to protect yourself and your insurance premiums. Here’s some ways to reduce your chance of getting a ticket:

·         Know your current driving record – spend a few bucks and request your driving record from DMV. Is it accurate? if there are inaccuracies, call your insurer and find out what the error is costing you.

·         Maintain your car – police frequently zone in on a car that has problems like broken headlights, taped-over taillights or a missing front license plant. Spend a couple bucks and replace the burned-out license plate bulb and you may save hundreds of dollars later.

Yellow_car ·         Don’t stand out – driving a bright yellow or lipstick red sports car doesn’t guarantee you’ll get pulled over, but it doesn’t help avoid police either. Besides, do you think a yellow car will help your resale value? And while driving, pay attention to the general pace of traffic and stay with the pack, rather than in front of, or behind. It would also not be wise to pass a police car, especially if by doing so, you’re also speeding.

·         Stay alert – besides paying attention to the road to avoid potential accidents, practice scanning your rear-view mirror often while driving. Look for possible spots far ahead where a police car would be hiding. Watch how others react on the road – if everyone else is braking, perhaps there is a reason!

And if you are unlucky enough to get pulled over, here’s advice for you:

Cop  ·         Don’t be mad; don’t have an attitude; and don’t talk too much – Most of the time, drivers don’t have much hope of getting out of a ticket. The officer has already made up his mind. Be nice and don’t act peeved, or else you may even be given the full fine. Some will also flag the citation with a notation, like “ND” – a note to himself to give a loudmouth “no deal” in court. Ever wonder what the officer is writing after you drive off? – he’s taking notes on what happened during the stop that stuck out in his mind, like your bad attitude or your admittance of guilt followed by your excuse. It’s all noted. So don’t say much, if anything beyond what is required of you to respond to the officer’s reasonable questions. If an officer asks you if you’d had anything to drink, you may say “no,” if you had nothing. But don’t add, “I can’t drink since I took Benadryl before driving.”

·         Don’t admit guilt – Pretty simple, just don’t. It’ll be noted and used against you later.

·         Don’t immediately pay the ticket – Simply paying the fine is an admission of guilt and could cost you in higher insurance rates.

Once you’ve got the ticket, here are some options:

·         call a lawyer – specializing in traffic tickets. You’d be amazed what results can be achieved. In some instances, individuals not eligible for traffic school can become eligible w/the representation of an attorney before a judge. Contact me, Lowell Steiger at lowell@steigerlaw.com for more information. I can refer you to an attorney whose practice revolves around representing people with traffic tickets.  His or her advice is very, very valuable.

·         traffic school – if you’re eligible, this is a great alternative. You pay the fine and take a 6-8 hour traffic school. Minor speeding convictions can be wiped from your record, and therefore go unseen by your employer or insurance company. In addition to the ticket fine, you pay an additional $50-$80 in tuition and processing costs. In

California

, you can go to traffic school once every 18 months.

·         go to court yourself – you can take your chances, roll the dice and plead your case. You can even hope the officer doesn’t show up. But if you made any sort of impression at the time of the traffic stop, such as giving the officer an attitude or saying anything that would be memorable (good or bad), there is a good chance the officer will appear. And it’s his word against yours!

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The Law Office of Lowell Steiger Represents Injured Victims

If you have suffered a Personal Injury, Call for a Free Consultation

Contact Attorney Lowell Steiger at (323) 852-1100

or via e-mail at lowell@steigerlaw.com

"Treated With the Respect That You Deserve"

www.steigerlaw.com

March 22, 2008

Attorney General Brown Shuts Down Mortgage Scam Artists

How has the Subprime Crisis affected you? 

  • Foreclosure?
  • Skyrocketing mortgage payments?
  • Negative credit rating?
  • Misled by lenders?

Call or e-mail me to learn about your legal rights.  Maybe all is not yet lost...

Lowell Steiger, Attorney at Law (323) 852-1100

lowell@steigerlaw.com

Attorney General Brown Shuts Down Mortgage Scam Artists

Ag_logo_lgbal80From the Attorney General of California's Website: LOS ANGELES, March 18, 2008 —California Attorney General Edmund G. Brown Jr. today shut down Lifetime Financial, Nations Mortgage, Greenleaf Lending, Virtual Escrow, Olympic Escrow and Direct Credit Solutions, accusing the predatory lending companies of pushing homeowners into “illegal and unconscionable loans.”

“As the mortgage crisis worsens, a growing number of fly-by-night companies are employing utterly brazen tactics to push homeowners into illegal and unconscionable loans,” Attorney General Brown said. “The illegal sales practices of these companies, run by Eric Pony and his family, included psychological pressure, forgery, and outright lies,” Brown added.

The companies ran a complex predatory lending scheme using bait and switch tactics to victimize thousands of consumers in California, many of whom have lost their homes.

Yesterday, the Los Angeles Superior Court, at the request of the attorney general, froze all the companies’ real estate and bank accounts and enjoined them from engaging in further predatory practices. The freeze order also included expensive cars and millions of dollars in private real estate owned by Eric Pony. Brown also seeks an estimated $20 million in penalties and restitution.

In the coming weeks, Brown intends to bring additional legal actions, both civil and criminal, against other mortgage lenders and foreclosure consultants who are taking advantage of homeowners across California.

San Bernardino District Attorney Michael A. Ramos also announced that several individuals affiliated with Lifetime Financial were arrested this morning on charges including conspiracy, grand theft, forgery and elder abuse. “These predatory lenders have taken advantage of people who placed their trust, as well as their homes, in the hands of these unscrupulous business people,” San Bernardino District Attorney Ramos said.

THE SCAM

Lifetime Financial, Nations Mortgage and Greenleaf Lending operate predatory lending schemes to cheat homeowners by promising unrealistically low mortgage payments and then switching them to loans that do not match the original agreement. Telemarketers lure consumers by telling them that they are preapproved for a fixed rate loan of 5% to 6% which could lower monthly payments by hundreds of dollars.

Although the exact number of victims is unknown at this time, Eric Pony, the President of Lifetime Financial, claims to have arranged thousands of loans. During the investigation that led to today’s lawsuit, the California Attorney General’s Office took declarations from more than twenty individuals who had been scammed by these companies.

Lifetime Financial arranged loans with hidden fees of up to $20,000. In addition to these fees, consumers end up with loans that have worse financial terms than their original mortgage.

In some cases, consumers were saddled with monthly payments that exceeded their entire monthly income. Many consumers have either lost their homes to foreclosure or are facing foreclosure as a result of engaging in these transactions.

Telemarketers initially request only a nominal payment for a home appraisal. Appraisers then inflate home values to qualify the homeowners for much higher loans than are appropriate. The companies never provide copies of theses appraisal reports to consumers.

Next, a salesperson shows up at the victim’s house, sometimes as late as 11:45 at night, with documents that are incomplete or contain terms that are vastly different from those originally promised. If consumers complain about the terms, the salespeople tell them that there is a mistake but they should just sign the paperwork to “keep this great deal.”

If a consumer refuses to sign the documents, company employees forge the customer’s signature. In some instances, the forgeries are so blatant that the victims’ names are misspelled.

As a result of these tactics, the final mortgage documents always contain extremely unfavorable terms that are substantially worse than originally promised by the telemarketers. Other fraudulent and unlawful practices include the following:

• Offering thousands of dollars in cash back without disclosing that the money would be used to cover high fees
• Falsely promising to reimburse prepayment penalties from the victim’s current lender
• Pressuring victims to sign inaccurate loan documents by promising to correct excessive fees
• Failing to provide copies of signed documents
• Forging victims names and signatures on loan documents
• Falsifying income information on loan applications and creating fake references
• Refusing to honor written demands to cancel loans

If a consumer tries to back out of the transaction, the companies promise to waive thousands of dollars in various processing, application, origination and underwriting fees. If the consumers agree, sales representatives provide a new statement but then resubmit the original forms, ultimately charging the same excessive fees.

THE SCAM ARTISTS

Lifetime Financial, Nations Mortgage, and Greenleaf Lending, all located in Los Angeles, operated complex real estate schemes involving, by Eric Pony’s own admission, thousands of transactions. Documents obtained during a recent search warrant confirmed that Lifetime Financial recently received more than $1.7 million from Olympic Escrow.

Some of the key players involved in companies’ conspiracy to rip off homeowners include the following individuals:

• Eric Pony, 25, a real estate sales person until he surrendered his license in September 2007 following an investigation by the California Department of Real Estate. Eric Pony is also known to use the alias “Oren” to conceal his unlawful practices.
• Paulette Pony, 23, Eric’s sister and a notary public for Lifetime Financial until her license was revoked in December 2007 by the California Secretary of State for felony conspiracy charges and failing to disclose a 2003 forgery conviction.
• Wilma Pony, 58, Eric’s mother, who also worked as a notary for Lifetime and is the President and Chief Executive Officer of Nations Mortgage, Inc. and Direct Credit Solutions, Inc., organizations which are also being sued today by the attorney general.

Lifetime Financial, and its web of affiliate organizations, has also operated out of Encino, Canoga Park, Glendale and North Hollywood.

The Pony family employed a team of telemarketers, notaries, brokers and escrow officers to peddle their fraudulent loan applications. These suspects, who solicited consumers in Spanish, English and Tagalog, knowingly broke the law in an effort to push consumers into loans they could not afford. The companies charged consumers with excessive hidden fees, as high as $20,000. Other suspects sued today include the following persons:

• Eli Hassine, 25, who was appointed a notary public in January 2005.
• John D H N Nielsen, a.k.a. Doo Hyun No, a licensed real estate broker for Nations Mortgage and Green Leaf Lending, Inc.
• Carol Pencille, 57, an escrow officer and the President and Chief Executive Officer of Olympic Escrow, a company involved in a kickback scheme with Lifetime whereby $2,700 in fees was taken from escrow proceeds through falsified amendments to loan documents.
• Sibpun Ampornpet, 31, an escrow officer, notary public, and principal of Olympic Escrow. A document shredder in Ampornpet’s office contained shredded signatures of consumers and other fraudulent paperwork.
• Dean Storm, a licensed real estate broker until a Department of Real Estate investigation led to the revocation of this license in September 2007.

At various times, Pencille and Ampornpet also worked for Virtual Escrow, Inc. and Olympic Escrow, companies that operated in Glendale, Encino and North Hollywood. The attorney general suspects that there are other people involved in these companies’ conspiracy to cheat homeowners and will amend the state’s lawsuit when these persons are identified.

THE VICTIMS

The following are two examples of the individuals who were manipulated by the company’s irresistible offers:

In 1996, Ron and Barbara Fitzgerald moved into their home in Lancaster, California. Ron is retired and his wife Barbara has been bedridden for several years due to a serious medical condition. In October 2006, Lifetime Financial offered the Fitzgeralds a 4.5% fixed rate with $800 monthly payments. The telemarketers offered to meet Ron at a nearby café to review paperwork.

During the meeting, Ron discovered that the paperwork did not conform to the terms that were discussed with the telemarketers. The sales agent told Ron that the paperwork was a “mere formality” and “everything would be taken care of.” Ron decided not to sign all the paperwork.

Later that month, the Fitzgeralds were stunned to find that their loan had been processed even though Barbara Fitzgerald did not, and could not have, signed any loan documents due to her medical condition. Investigators later determined that all the signatures and initials on the loan documents were forged.

The Fitzgerald’s mortgage went from $189,000 at an adjustable rate of 8.04% with monthly payments of $1,100, to now owing $244,000 at an adjustable rate of 8.5% with payments of $1,788.

Luis Garcia, a 75 year old disabled senior from Peru, has limited understanding of English. Lifetime Financial contacted Garcia in Spanish and promised to refinance his mortgage into a low, fixed rate. Garcia agreed to a 50 year loan with $1,000 monthly payments and was shocked when he received a letter from New Century Mortgage stating that his new loan rate was 7.95% and his initial monthly payment would be $2,254. All the paperwork provided to Garcia was written in English.

With help from translators and family, Garcia discovered that Lifetime Financial had falsified almost all of Garcia’s information including his monthly income and work history. Garcia was unable to afford the extremely high monthly payments and ultimately lost his home.

THE CHARGES

The attorney general is seeking civil penalties of $2,500 for each violation of law and full restitution as well as a permanent injunction against operation these businesses. Penalties and restitution are estimated to exceed $20 million. The following assets are subject of the seizure order:

• Bank accounts at Wells Fargo, Bank of America, Citibank, East West Bank, First Federal Bank and Washington Mutual
• 16 separate private and commercial properties, valued at more than $6 million, in Tarzana, Canoga Park, Studio City, Las Vegas, San Antonio, Sherman Oaks, North Hollywood and Los Angeles
• All personal property, especially luxury cars, including: 4 Mercedes Benzs, 2 Ferraris, 1 Land Rover, 1 BMW, 1 Audi and 1 Bentley

Other agencies which assisted with the investigation that led to today’s lawsuit include: Los Angeles Department of Consumer of Affairs, California Department of Real Estate, the California Department of Motor Vehicles and the San Bernardino District Attorney.

Read People_v. Lifetime Financial Complaint, filed yesterday afternoon under seal in Los Angeles Superior Court.

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How has the Subprime Crisis affected you? 

  • Foreclosure?
  • Skyrocketing mortgage payments?
  • Negative credit rating?
  • Misled by lenders?

Call or e-mail me to learn about your legal rights.  Maybe all is not yet lost...

Lowell Steiger, Attorney at Law (323) 852-1100

lowell@steigerlaw.com

Creative and Amazing Gas Saving Solutions

With gas prices hitting over $4.00 per gallon in some spots around the U.S., we're all searching for ways to save money on that which fuels our country: Fuel!!!

Save_gas ABC News did an interesting story -- click here to watch video --on alternative means to power your car.  Fred Crane invented the Mileage Master which appears to significantly increase gas mileage.  You flip a switch when you reach a certain speed thereby cutting off gas flow to half of the cylinders.  Crane says that a person getting 20 miles per gallon spending $100 per month could reduce that bill to $35 per month!

Vegetable_oil_diesel Gordon Blau runs his diesel powered vehicle on vegetable oil!  This ABC News Report tells all.  Saving over $3,000 a year, "Blau fills up his tank with leftover grease he gets for free from neighborhood Chinese restaurants. Blau's car runs on diesel. After mixing in the Chinese food grease, he only spends $20 every three weeks at the gas station."  Downside? His garage smells a bit like old Chinese food. Interesting related links:

Wrightspeed_ian Entrepreneur Ian Wright, founder of Wrightspeed, has produced a $150,000 electric car that can hit speeds of up to 170mph and goes 0-60 in 3 seconds!  Watch this informative CBS News Video.

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The Law Office of Lowell Steiger Represents Injured Victims

If you have suffered a Personal Injury, Call for a Free Consultation

Contact Attorney Lowell Steiger at (323) 852-1100

or via e-mail at lowell@steigerlaw.com

"Treated With the Respect That You Deserve"

www.steigerlaw.com

March 21, 2008

Predatory Lending Practices Defined

Predpete

The National Association of Consumer Advocates is a fantastic organization comprised of attorneys and other individuals dedicated to championing consumer rights -- your rights.  They are there for the consumer when it comes to:

  • Auto Fraud
  • Credit Reporting Problems
      • Debt Collection Abuse
      • Identity Theft
      • Lemon Law
      • Military Consumer Rights
      • Predatory Lending Practices
      • Student Loans

I have a particular interest in the substance of their organization as my practice is now taking on the types of cases which the National Association of Consumer Advocates addresses.

Of topical note is their published piece on predatory lending practices, the substance of which is posted below:

Predatory Lending Practices

There are a number of different forms that predatory lending takes. In each instance, however, a financial institution takes unfair advantage of a consumer’s financial needs by charging usurious interest rates and other unconscionable fees and charges:

Predatory Mortgage Lending: drains wealth from families, destroys the benefits of homeownership, and often leads to foreclosure. It is estimated that predatory mortgage lending costs Americans more than $9.1 billion each year.

Predatory mortgage lending involves a wide array of abusive practices. Here are brief descriptions of some of the most common.

Excessive fees: Points and fees are costs not directly reflected in interest rates. Because these costs can be financed, they are easy to disguise or downplay. On competitive loans, fees below 1% of the loan amount are typical. On predatory loans, fees totaling more than 5% of the loan amount are common.

Abusive prepayment penalties: Borrowers with higher-interest subprime loans have a strong incentive to refinance as soon as their credit improves. However, up to 80% of all subprime mortgages carry a prepayment penalty -- a fee for paying off a loan early. An abusive prepayment penalty typically is effective more than three years and/or costs more than six months’ interest. In the prime market, only about 2% of home loans carry prepayment penalties of any length.

Kickbacks to brokers (yield spread premiums): When brokers deliver a loan with an inflated interest rate (i.e., higher than the rate acceptable to the lender), the lender often pays a “yield spread premium" -- a kickback for making the loan more costly to the borrower.

Loan flipping: A lender "flips" a borrower by refinancing a loan to generate fee income without providing any net tangible benefit to the borrower. Flipping can quickly drain borrower equity and increase monthly payments -- sometimes on homes that had previously been owned free of debt.

Unnecessary products: Sometimes borrowers may pay more than necessary because lenders sell and finance unnecessary insurance or other products along with the loan.

Mandatory arbitration: Some loan contracts require "mandatory arbitration," meaning that the borrowers are not allowed to seek legal remedies in a court if they find that their home is threatened by loans with illegal or abusive terms. Mandatory arbitration makes it much less likely that borrowers will receive fair and appropriate remedies in cases of wrongdoing.

Steering & Targeting: Predatory lenders may steer borrowers into subprime mortgages, even when the borrowers could qualify for a mainstream loan. Vulnerable borrowers may be subjected to aggressive sales tactics and sometimes outright fraud. Fannie Mae has estimated that up to half of borrowers with subprime mortgages could have qualified for loans with better terms. According to a government study, over half (51%) of refinance mortgages in predominantly African-American neighborhoods are subprime loans, compared to only 9% of refinances in predominantly white neighborhoods.

Short Term Predatory Lending

Payday Lending (sometimes called cash advance): is the practice of using a post-dated check or electronic checking account information as collateral for a short-term loan. To qualify, borrowers need only personal identification, a checking account, and an income from a job or government benefits, like Social Security or disability payments.

Overdraft Loans (also called "bounce protection" plans): are offered by banks to low-income consumers. In exchange for covering account overdrafts up to a set dollar limit, banks charge bounced check fees, ranging from about $20 to $35 for each transaction. Some banks also charge a per day fee of $2 to $5 until the consumer's account has a positive balance. In addition to writing checks, customers can borrow against their bounce protection limit using their debit cards and by making ATM withdrawals.

Car Title Loans: Like payday loans, car title loans are marketed as small emergency loans, but in reality these loans trap borrowers in a cycle of debt. A typical car title loan has a triple-digit annual interest rate, requires repayment within one month, and is made for much less than the value of the car. Car title loans put at high risk an asset that is essential to the well-being of working families -- their vehicle.

Tax Refund Anticipation Loans (RALs): are short-term cash advances against a customer's anticipated income tax refund. But the loans are offered at high interest rates, ranging from about 40% to over 700% APR. Also, they speed up the refund process by as little as one week, compared to what consumers can expect by filing online and having their refunds deposited directly into their banking accounts.

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How has the Subprime Crisis affected you? 

  • Foreclosure?
  • Skyrocketing mortgage payments?
  • Negative credit rating?
  • Misled by lenders?

Call or e-mail me to learn about your legal rights.  Maybe all is not yet lost...

Lowell Steiger, Attorney at Law (323) 852-1100

lowell@steigerlaw.com

Ex-Subprime Borrowers Living In Tent Cities

The BBC has produced a shocking video depicting ex-subprime borrowers, once proud homeowners, now living in tent cities that have sprung up in Southern California as victims of the mortgage crisis lose their homes. 

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How has the Subprime Crisis affected you? 

  • Foreclosure?
  • Skyrocketing mortgage payments?
  • Negative credit rating?
  • Misled by lenders?

Call or e-mail me to learn about your legal rights.  Maybe all is not yet lost...

Lowell Steiger, Attorney at Law (323) 852-1100

lowell@steigerlaw.com

March 20, 2008

Subprime Debacle: A Primer - Know Your Rights

SssubprimeThe Subprime Crisis is complex, frustrating and, most of all, enraging.  The 1000's upon 1000's of unsuspecting victims range from borrowers trying to get a home to major investors trying to make a legitimate return on their investment.  As it unfolds, the litigation against mortgage brokers, lenders, appraisers and everyone in the chain will increase exponentially. 

The Subprime Primer is a comical, yet sobering, series of cartoon frames that explains the etiology of the Subprime Crisis.  Beware, there are some four-letter expletives throughout but they enhance, rather than detract, from the subject matter.

How has the Subprime Crisis affected you? 

  • Foreclosure?
  • Skyrocketing mortgage payments?
  • Negative credit rating?
  • Misled by lenders?

Call or e-mail me to learn about your legal rights.  Maybe all is not yet lost...

Lowell Steiger, Attorney at Law (323) 852-1100

lowell@steigerlaw.com

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