your thoughts?

Per Mel Brooks' comedy "History of the World Part I" they should be be given the penalty for striking a Roman citizen - a living snake shoved up their...or ahh rather, be thrown to the lions.

Damon Di Placido
Wachovia Mortgage
damon.diplacido@wachovia.com

Each State has different guidelines as far as the high cost test. Some tend to be a little more stringent than others. I have a breakdown of each states test requirements if you would like.

Predatory Lending...

1) Using deceitful advertising to lure customers such as bait & switch advertising.

2) Knowingly putting customers in loans they cannot afford or charging fees and/or interest rates that are well above market. For example, your client easily qualifies for a 30 fixed rate mortgage at 6.25%, but you put them in a 2/28 sub prime loan at 8%.

Predatory lending is hard to define, but I think everyone knows it when they see it. The reality is that there is very little predatory lending going on. However, it is the cause du jour of consumer groups nowadays. Most predatory lending is preventable if consumers would simply pull their heads out of their a**.

I think any lender/lo that knowingly takes an elderly person or a customer to the cleaners in a predatory fashion should be shot in the public square.

However, consumer are so focused on getting themselves the "best deal" that they essentially rate shop themselves out of good mortgages into the hands of the biggest liars. Until consumers take a step back and realize that this purchase is too important and complicated to be broken down to simply an interest rate, they will continue to be taken advantage of.

There is predatory lending and then there are dumb consumers and I think both are related. Every LO has seen the 50% DTI, 80/20 stated income, 620 FICO deal where the buyer won't let anyone tell them they can't afford the home and maybe they are getting in over their head. Foreclosure just waiting to happen. Yet, as soon as it goes bad, the consumer is the first one yelling about the bank should have known I couldn't afford this home. Absolutely no personal responsibility.

Most lenders have instituted PTF Audits to prevent Predatory Lending. I used to be a Corporate Compliance Officer for a very large Sub-Prime lender and this is something we implemented in addition to our "in process" branch audits.

Countrywide and Ameriquest just paid some hefty fines for predatory lending but most of the agents around here are still referring deals to them.

Predatory Lending? Come here, to the city of Cleveland, Ohio, and see the results.

Can't throw all the blame into the lenders' lap. Agents, appraisers, lenders, & buyers are all at fault. Someone in the whole RE transaction process has to have the cajones to say something. I for one am not shy about telling a buyer that right now may not be a good time to buy in regard to their financial situation, even when a lender says they can get them approved.

So much for the American Dream. I don't think that the 310 NEW foreclosures in Summit County alone last month consider it a dream. More like a nightmare.

Ahhh...so its proper for me to feel I am performing a forensics evaluation on a lender diligence order?

Thanks, I feel better...

Yor

Here is a link to my website where I have the Predatory Lending Regulations broken down by state: http://stinsonfncl.com/second.php?PID=12126&FUNCTION_ID=116537&VisitorTracker=&backo=

Yeah!

In 2003 Summit county was the 3rd worst economic county in the united states and Cuyahoga county was #1.

Real Estate Property Depriciation.

Mainly due to job cuts and layoffs though rather than predatory lending.

The city of Cleveland caps fees to 4% of the loan. The majority of sub-prime lenders will not allow loan officers to conduct business in the city of Cleveland. The Fee and Rate caps are so low the lenders investors are limited to the amount of margin they can make off each loan and do not want to risk a problem since it is a predatory lending law "The Cleveland High Cost Ordinance"

But, in USA!

Investing is everywhere and city revitalization is needed badly. Investing helps and Investors are capitalizing on the banks losses and making it their gain. When a home is rehab it increases value and drive up prices over a long period of time. Say 3-5 years. You see rehab all up and down streets and the more it happens the better things get. It is taking back the interest from the bank in a sense. :-)

CLEVELAND, OH:

*COVERED LOANS:

Applies to:

All loans on owner-occupied 1-4 family dwellings, condos, or co-ops located within the City of Cleveland.

Does Not Apply to:
-Loans primarily for business purposes

APR THRESHOLD:

First Mortgages:

APR at any time during life of loan is 4 ½ % or
more but less than or equal to 8% + comparable treasury index.

Second Mortgages:

APR at any time during life of loan is 6 ½% or
more but less than or equal to 10% + comparable treasury index.

***Plus any triggers listed under "other"

FEE & POINTS THRESHOLD:

Loans $16,000 or over:
Financed Fees and Points
in excess of 4% of the total
loan amount.

Loans under $16,000:
Financed Fees and Points
in excess of $800.00

***Plus any triggers listed under "other"

FEES INCLUDED:

1. All fees included in TILA Section 32 calculations.
2. YSP

FEES EXCLUDED:

1. Prepaid or per diem interest.

OTHER:

Additional Predatory Triggers:
• Prepayment Penalties
• Balloon payments
• Negative amortization
• Lending without regard to repayment ability
• Lending without home counseling
• Direct payments to home improvement contractors
• Loan flipping
• Plus certain other loan terms

I admit, 6 years ago, my head was up there. 6 years later, I am still stuck with a predatory loan with little to "break even" equity in my home and wasted money. Is there ANY way to get help beyond forclosure? I have great credit. Just wasting money month to month.

Thanks AZ lender. Now they can see everything.

It is a tough area.

Very few lenders have no Foreclosure seasoning to where you could get a loan with less than 3 years out of foreclosure.

The one's who do have very high rates and fees.

How long so far though? Most go from the actual Foreclosure date even if you discharge the home through Chapter 7 BK. Sometimes that is months or even years after you discharge it through a BK.

As mentioned above, I have one of these loans yet I am on time with all of my bills but just have very little to live on and no equity in the home. I can't refinance (get refused based on the 2nd predatory loan I have) and if I sell, I'll have to take the remaining balance with me on a credit card. Suggestions?

Not nearly enough information provided for me to give an adequate response. I am not licensed in Arkansas, however I can give you advice to pass along to another lender. Give me a call if you wish to discuss in further detail. I'd be more than happy to help.

www.stinsonfncl.com

I just got this response from the current loan holder via the BBB...can anyone tell me if this is a good idea? They want to Short Payoff:

Homecomings Financial has received a copy of your inquiry filed with the Better Business Bureau of Minnesota and North Dakota. We appreciate this opportunity to address the issues outlined in your letter.

Guaranty National Bank originated this loan on May 19, 2000. The mortgage was transferred to our company for servicing on April 1, 2001. This transfer did not change the original terms and conditions of the loan. Unfortunately, because we did not charge or receive the closing costs, we are unable to refund these to you.

Our company understands the difficulties you may have encountered when trying to the sell the property because of the Loan to Value ratio. Homecomings Financial would like to extend the offer of a possible Short Payoff, whereby we would accept an amount less than the total amount due to satisfy the debt.

Please complete the enclosed financial package and return it along with the required documentation listed on the coversheet.

Be very careful how you negotiate this contract should you decide to move forward with it. I would hire an attorney. This can affect your credit in a number of ways.

OK...I wont "jump" at this at all...will do my research...I have nearly resigned myself into just sitting on this egg for another 3 years or so and they do this to me. If this is done right and with a lawyer, could this actually be a good thing?

Considering how much I've already paid in interest alone, I wonder if half of the balance Short Payoff is realistic...

"If this is done right and with a lawyer, could this actually be a good thing?"

Yes. Short answer.