Using Recission to Stop Foreclosure

Christine explains the concept of recission and how it relates to foreclosure and loan modifications.

Foreclosures Are More Profitable Than Loan Modifications?

The Washington Post printed an article today stating that in many cases, it’s more profitable for the lender to foreclose rather than work out a loan modification with the homeowner.

Finally, we have someone telling the REAL truth about why lenders aren’t modifying more loans!

A lot of people have been scratching their head trying to understand why lenders aren’t modifying more loans, especially given the government’s financial incentives to lenders to modify more loans.

As usual, the lenders are acting in their own self interests because they can. Remember, your taxpayer dollars are shoring up their bottom lines and now they don’t have to negotiate with you because they already have your bailout money.

It’s hard for me to imagine how it could be more profitable for a lender to foreclose rather than working out a loan modification given the falling home prices.

Of course, there are other reasons why modifications supposedly aren’t working. I keep hearing a lot about how lenders are woefully understaffed and underequipped to handle the sheer volume of homeowners who are asking for help right now.

This is just a weak excuse for the lender’s failure to act. Unemployment is at a record high in this country. CitiMortgage, Wells Fargo and Bank of America have a talented pool of unemployed workers who need jobs. Why aren’t they hiring more people?

So how can you fight foreclosure and save your home?

First, get a loan audit before you do anything else! Go here to learn more about how you can get a loan audit. If you can’t afford to have a professional auditor perform the audit, I’ve written a Do It Yourself Audit eBook that you can purchase.

Modifying a loan without a loan audit is a bad idea for several reasons.

First, if there are predatory lending patterns in your documents and you don’t know about them, and you modify the loan, you waive your rights to pursue the lender in court for the bad loan you originally received.

Second, if the lender lied to you by failing to disclose all the details of the loan, this is leverage against the lender to get a better loan modification instead of just accepting the standard loan modification they give everyone else.

Third, follow up with a competent professional who will aggressively represent your interests in forcing the lender to modify your loan fairly. I suggest you use an attorney for this – a good one will almost always get you a better result than you can get on your own.

I know, it sucks to have to hire an attorney. Many people got into this mess because they didn’t understand the documents they were signing, and a home is the biggest investment most people will make in their lifetimes. It’s worth it to pay someone to do it right.

Finally, consider filing a lawsuit against your lender if your loan stinks of predatory lending. When more people stand up to the banks, this nonsense of the banks not helping people will stop. We’re all held accountable for our actions as individuals; why shouldn’t the banks be called out for screwing homeowners and refusing to help them? I am working hard on finding attorneys who will be good partners for homeowners, so contact me for a referral if you need one.

If you have questions, post them in the forum or send me an e-mail: Christine@DesertEdgeLegal.com.

Governor Brewer Signs Legislation Gutting Anti-Deficiency Statutes in Arizona

Today I received an e-mail from Alan Langston, Executive Director of the Arizona Real Estate Investors Association, regarding Arizona SB 1271. He says :

“Undoubtedly you have heard and read a lot about legislation that was recently passed and signed by Governor Brewer that basically guts the protection of property owners and allows for ”deficiency judgments” to be entered for the difference between what the foreclosure property sells for and the amount of the loan. It is important to note that the Arizona Statutes providing this protection had been on the books since 1971 and in most states since the Great Depression. There is no question this is bad legislation. It was hurried through the legislative process through a “strike everything” that totally replaced language in an entirely unrelated bill dealing with the criminal justice system. The “strike everything” tactic was one of the primary reasons that no one who represents property owners noticed the legislation and no one other than the banking interest testified at the committee meetings.

Since this came to light we have been very active. You, as an investor, are a stakeholder in this and need to be heard. I have had many conversations with our lobbyist planning and executing our strategy. We have worked very closely with the lobbyist for the Arizona Association of Realtors (AAR). There has been plenty of maneuvering behind the scenes as different stakeholders on different sides of this issue try to build their coalitions. I sent a letter to Governor Brewer last Wednesday requesting the special session be amended to include this legislation pointing out many of the issues. Our focus is to have this law repealed, so that it (if reintroduced in the next legislature) can be fully vetted with all stakeholders participating in the debate.

There will be meetings this week with legislators to discuss this issue. We will be in these meetings representing your interest along with other stakeholders. The first meeting is tomorrow with the sponsor of the legislation, Senator Pierce.

I want to be clear. We have our work cut out for us to have this repealed. This is signed law. But, it is just as clear that all stakeholders weren’t heard. This law affects homeowners, owners of second homes and vacation property, investors, builders and others. It has the ability to devastate personal wealth, sharply increase bankruptcies, significantly slow our fragile real estate market, curtail investment in property, increase lawsuits and more. We will have a full discussion of this legislation and what has transpired during our August 10th AZREIA meeting. The workshop at 5:15 features our lobbyist. It was originally scheduled to cover all legislative activities that affected you, the real estate investor. It will be altered slightly to allow time to cover this issue in full.” 

Essentially, this law removes the deficiency protections on investors of real estate. That means if you own property as an investment, and you lose it to foreclosure, the lenders can now pursue you for the deficiency. I can’t figure out why she would allow this law to be passed, because it’s going to discourage investment in Arizona and push a lot of investors into bankruptcy to get out from under these judgments. It runs counter to Arizona’s best interests.

This is a great example of our elected officials representing the interests of the BANKS and not the citizens.

Arizonans, call Governor Brewer’s office TODAY at (602) 542-4331 and tell her you want this law repealed!

A Letter to Congressman Shadegg of the Third District of Arizona

The Honorable John Shadegg
2400 E. Arizona Biltmore Circle, Suite 1290
Phoenix, Arizona 85016

Re: Foreclosure Crisis in Arizona

Dear Congressman Shadegg:

My name is Christine Springer. I am a freelance paralegal specializing in mortgage loan audits. I live in Scottsdale, Arizona and am one of your constituents.

As I’m sure you know, many of your constituents, myself included, have lost or are losing their homes to foreclosure. I have studied your record on this issue and I’m angry that you that you and the rest of our leaders in Arizona and the United States are standing by while people are losing their homes due to the devastating economic crisis.

I have audited quite a few loan documents, and I’m convinced the banks, lenders, mortgage brokers and other parties to the transactions in the last seven years were consistently predatory. It’s easy to say that the borrowers were at fault too; I agree that there is some personal responsibility involved. However, as I’m sure you understand from your legal background, most people don’t fully understand many of the documents they signed at closing.

The bottom line is that the lenders in this country have preyed upon borrowers. I see it all the time in the loan documents I audit on behalf of homeowners who are desperately looking for a way to save their home.

To make matters worse, our government authorized an unprecedented bailout of some of the largest lenders, many of whom are some of the worst offenders of predatory lending! As soon as these lenders received our taxpayer money, they stopped negotiating in good faith with borrowers who were in trouble.

Essentially, the TARP funds financed by our taxpayer dollars incentivized lenders to stop helping homeowners. Right now, very few people are qualifying for loan audits because they have lost their jobs. In many cases, it takes months to get a short sale approved. This is ridiculous!

The bottom line is that I’m tired of my elected officials standing by and doing nothing, and I’m going to start holding my elected officials publicly accountable. I’m going to call you out on Twitter, Facebook and my blog until you all do what you’re supposed to do – represent the interests of your constituents.

You can do this by helping me reach homeowners who need my help. I plan to hold a free event where I will personally conduct FREE mini-loan audits for people who are trying to save their homes. There seems to be no other way to get the lenders to work with people. I intend to have attorneys on hand who can give people legal advice and help them save their homes.

If you would like to partner with me in this effort, I welcome your input and assistance with spreading the word about the event to the people who need my help the most. Please have a representative from your office contact me directly at 602-350-2151 to discuss the details if you’re interested.

Thank you in advance for your attention to this matter. I look forward to your response.

Very truly yours,

 

Christine E. Springer, MA
Desert Edge Legal Services, LLC

Questions to Ask Before You Hire a Loan Modification Company

It’s too bad that the vast majority of loan modification companies have ruined it for the fewer numbers of companies who are legitimately helping people. It’s sickening to think that homeowners are being scammed because they are vulnerable as a result of their mortgages and the dire economic situation in this country.

I am asked a lot of questions about loan modification companies, which is why I compiled this list of things you should ask before you hire a loan mod company.

1.           Are they properly licensed?

California requires that loan modification companies be licensed.  Arizona, where I live, will begin requiring a license for loan modifications in 2010.

Ask to see a copy of their license or do your research online before hiring them. Run a Google search on the company and see what comes up. You can also check the BBB and your state’s Attorney General website for information.

2.           Are they supervised by an attorney licensed in your state?

Beware of this one! Many loan mod shops are advertising that they are “attorney backed” or “attorney supervised.” These terms are meaningless. It means they are trying to make you believe that a licensed attorney is on staff and to give the impression that they have an edge over the next company. You should be immediately suspicious.

Bar associations have strict rules about referral fees and lawyer affiliations with non-attorneys. Attorneys are prohibited from paying referral fees to non-lawyers, so you should be suspicious of any loan mod shop who says they are “attorney backed” or “attorney supervised.”

I don’t know any attorney who is going to risk their law license for a few leads from a loan mod shop. It’s just not worth it.

I recommend you hire a law firm that specializes in loan modifications and foreclosure defense. These law firms are sometimes hard to find. I know because I spent months looking for an attorney who would even speak to me about helping homeowners. If you need a referral, send me an e-mail at Christine@DesertEdgeLegal.com and I’ll point you in the right direction.

Also, I see bloggers and other commentary on the internet from people who say that you should hire “an experienced real estate attorney.” I’m an expert when it comes to TILA/RESPA, and most real estate attorneys I’ve met with are clueless about this new area of law. Foreclosure defense has really only been around for about a year and as I mentioned in a previous post, lawyers have been slow to get into this area of law for various reasons.

Unless an attorney has been practicing in foreclosure defense for the last year, they are not positioned to get you a decent loan modification or represent you in a lawsuit against your lender. So forget all this nonsense about real estate attorneys being the best type of lawyer to hire, because is most cases, it’s just not true.

3.           Does the loan modification company have a money back guarantee?

I’ve seen this one backfire too. A couple of my clients hired me to do an audit, and they found a loan modification company on their own, who told them that an attorney was on staff.

They paid the $4000 upfront fee, got the money back guarantee in writing and were happy…… until the loan mod company called and said they could no longer honor their money back guarantee because of circumstances related to the borrower’s situation.

When my clients asked for their money back, the loan mod shop refused to give them a full refund because they had already worked on the file. These “circumstances” should have been disclosed before the homeowners paid them the money.

If you don’t get an unconditional money back guarantee in writing, you should be suspicious, and even if you do, I’d still be suspicious. This is only the case if you hire a non-attorney loan modification shop.

If you hire a lawyer, they will most likely not give you a money back guarantee. However, if you get scammed by an attorney, you can go to the bar association and file a bar complaint. In my opinion, it’s worth the peace of mind. A lawyer is going to think twice about scamming clients because they don’t want to risk losing their license.

4.           Does the company perform a loan audit and use the findings as leverage for a modification? What if the loan stinks of predatory lending? Will the attorney agree to pursue litigation if warranted?

I heard a statistic today that said 85% of borrowers have mistakes, undisclosed fees or hidden finance charges in their loan documents. A loan audit is ALWAYS the first step in a loan modification. If the company isn’t conducting a loan audit, don’t bother hiring them.

Any attorney who is well versed in foreclosure defense will tell you that a loan audit is always the first step, (sometimes they know what they’re talking about) because it shows you where the causes of action are to use as leverage against the lender.

Many of the loans I’ve audited have enough problems to use as leverage for a decent loan modification (not necessarily a principal reduction, however), which, for many clients, is their desired outcome.

However, there are other clients whose loans just stink of predatory lending and they should pursue the lender in federal court for violations of TILA/RESPA.

Here’s the problem: as I referenced in an earlier blog post, lawyers have become afraid to pursue lawsuits! It’s the craziest thing I’ve ever seen. Who would have thought lawyers would ever be afraid to go to court?

I know of one law firm that says they will not sue lenders because it will impact their ability to get loan modifications for their clients. I’m not a lawyer (yet) but I think this is a load of crap.

If a law firm had a reputation as aggressive and not afraid to pursue litigation, the lenders would push the mod paperwork through a lot faster because they know the law firm would sue them. The threat of litigation is usually a good incentive to move faster.

5.           Who is making money on my loan modification? How many parties are involved?

I’m a firm believer that if you’re adding value for others, you should be fairly compensated. It’s completely reasonable for a loan mod shop or law firm to pay people for legitimate services provided, such as the loan audits or marketing fees.

However, I object to the multi-level marketing and other schemes perpetuated upon homeowners when it comes to loan modifications.

I attend a lot of networking events here in Phoenix, and it seems like everyone is hawking loan mods these days. It scares me to think that people with no legal experience are pushing people into loan mods without any discussion of loan audits or predatory lending. When you modify a loan, you essentially waive any claims you have under TILA/RESPA. Wouldn’t you like to know if you could pursue your lender for a better loan modification before you get their boilerplate modification agreement? I certainly would.

Or worse, the person selling loan mods is a former mortgage broker. Many of these people are partly responsible for this mess we’re all in. A lot of mortgage brokers were selling products to borrowers without fully disclosing their fees and acting in their own self interests, instead of selling the borrowers a product that was in their best interest.

My point is, you should ASK who is handling your file and who is making money on it.

Federal Mortgage Program Isn’t Helping the People Who Need it the Most

Many homeowners were hopeful earlier this year when the President announced the Making Home Affordable program. A key part of the $75 million Making Home Affordable plan was a loan-modification program that compensated lenders for lowering the mortgage payments of borrowers who were making less money because of the recession. The government offered banks and borrowers bonuses for making loan modifications work. Most of the big lenders agreed to participate.

A record 5.4 million people are behind on their mortgage payments. Thus far, only 240,000 people have received loan modifications through the program.

So what’s the problem? The lenders are the problem.

Many lenders were required to offer a trial period with lower payments if the mortgage was backed by Freddie or Fannie.  However, once the trial periods were over, they did not give the homeowner a permanent modification.

Other lenders are revoking modifications! Some housing counselors in Arizona speculate that it is more profitable for lenders to foreclose on homes rather than modify the loans.

Despite federal incentives for lenders to modify loans, they would rather foreclose on your home than negotiate to keep you in the home.

What really makes me angry about the mortgage mess? The lenders screwed the American people when they closed these loans. I’ve seen it in the loan audits I’ve done. If you don’t think you were screwed, get a loan audit and see what gets uncovered. Every file I’ve audited has problems!

Next, the American taxpayers wrote these lenders a BIG check under the TARP (Troubled Asset Relief Program, a/k/a “bailout”) to prevent them from collapsing. 

As I’ve mentioned in another post, now that these lenders’ bottom lines are shored up with your taxpayer dollars, they don’t have an incentive to work with homeowners. They’ll just take your house.

Wake up America! This is happening before your eyes, and it’s time to fight back! 

Call your congressmen, senators, governors and the President’s office and pressure them to do more to save your homes. Get a loan audit to look for predatory lending patterns with your loan and use those findings to force the banks to negotiate with you if you want to save your home.

Don’t wait for the government to bail you out — take action on your own behalf!

Produce the Note

I get asked a lot of questions about the produce the note argument as it relates to foreclosures.

In order for a party to foreclose on a property, that party must have standing to be a party to the legal action.

The term standing means:

Standing or locus standi is the term for ability of a party to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that party’s participation in the case.

(Excerpted from Wikipedia.com)

In terms of a foreclosure, this means that before your property can be foreclosed upon, the party who is actually foreclosing must be the party with standing. The proper party to foreclose is the actual owner of the Note to your property.

Sounds simple, right? Unfortunately, it isn’t. The party who actually owns the note isn’t usually the party who is actually foreclosing.

What’s really scary about this situation is that a borrower might scramble to make up the arrearage to get out of foreclosure, and another party can still come after the borrower to foreclose because they actually own the note!

During the real estate boom of 2001 – 2007, when a loan closed, the Note and the Deed of Trust were recorded with the original lender that in many cases, was only acting as the lender at the table (“table funding”).

The mortgage would be recorded with the Mortgage Electronic Registration System (“MERS”) which served as the lending industry’s way around properly recording the ownership chain of mortgages at the county recorder’s level.

Once the loan closed, the servicing rights (the right to collect payments) were sold and the actual mortgage itself was packaged up with other mortgages and sold to investors as part of a mortgage backed security.

In most cases, borrowers will never know who the true owner of their note actually is, because the chain of assignment was never properly recorded at the county recorder’s office where the property is located. Banks are the only institutions that have access to the MERS database.

MERS is typically added as a “beneficiary” under the Deed of Trust to a property. It’s interesting how the lending industry got away with this. MERS is an electronic database!

According to the MERS website, “MERS remains the nominal mortgagee no matter how many times servicing is traded.” MERS website also maintains that it is nothing more than a computer system designed by the mortgage industry (and capitalized by investors from the mortgage industry) to protect them from having to pay recording fees so that the entity that owns any mortgage loan is available. 

MERS entire business operation is premised on the wholesale and ever changing sale or transfer of “servicing rights.” MERS does not own the loans, rather they are acting as a “nominee” for whomever might or might not say that it owns the note at any given time.  Further, since MERS never obtains possession of the Promissory Note which secures the Deed of Trust, it cannot ever have the right to enforce the terms of the Deed of Trust, since that right is reserved to the owner and holder of the secured instrument, the Promissory Note. 

So how can MERS foreclose on the property since it’s an electronic database and a nominee for the owner of the note? It cannot, because MERS doesn’t have standing.

So what does this mean for the borrower? It means that there’s a very good chance that the foreclosing party will not be able to produce a copy of the original note to your property.  During the real estate boom, lenders were in such a hurry to make loans so that they could be repackaged and sold that many times, they failed to maintain the proper chain of assignment.

This presents an opportunity for you, the borrower. If you’re in foreclosure, ask the lender to produce the note! This argument is working well in states like Florida, which is a judicial foreclosure state.

If you live in a non-judicial foreclosure state, such as Arizona, the lender will typically use a trustee’s sale to take your property, which means they won’t actually file a lawsuit against you to take your home away. This makes it harder to make the prove the note argument because there is no lawsuit pending where you can go to court and ask the lender to prove they own the note.

If you live in a non-judicial foreclosure state, you must file a lawsuit against the lender to stop the foreclosure. This problematic because many times, if a homeowner is in foreclosure, they cannot afford to hire an attorney to represent them. This is why the produce the note argument isn’t working well in Arizona, which is where I live.

If you have the resources to challenge the lender, I’d suggest you get a loan audit to look for TILA and RESPA violations. If violations are found, you can file a lawsuit against the lender for those violations AND as part of the lawsuit, your attorney should ask the lender to produce the original note.

If this is done correctly, and your lawyer is competent, the lender will be forced to prove they own the note as part of the discovery phase of a lawsuit.

If the lender cannot demonstrate that they actually own the note, the debt becomes unsecured, just like credit card debt. If the lender cannot prove that it owns the original Note during litigation, your attorney will likely petition the court for a “quiet title action” which means they will ask the judge to wipe away the note.

Don’t get your hopes up about this possibility. You’ll need to have the correct fact pattern, a good attorney (which, here in Arizona they seem to be few and far between when it comes to this area of law), a stomach for uncertainty and a budget for litigation.

You might be able to make the produce the note argument outside of filing a lawsuit, but the purported lender will probably just send you a copy of what was recorded at closing. As we’ve established, in most cases, the original lender is no longer the actual lender.

If you live in a judicial foreclosure state, by all means, go to court and request that the foreclosing party PRODUCE THE NOTE!

If you live in a non-judicial foreclosure state, consult with a competent attorney who has experience in foreclosure defense on the best way to proceed in your circumstances.

What is a Forensic Loan Audit?

A forensic loan audit, sometimes called a TILA audit, or a loan audit, is a process whereby an auditor reviews a borrower’s mortgage loan documents to determine if the documents are in compliance with the Truth In Lending Act (“TILA”), the Real Estate Settlement Procedures Act (“RESPA”) and other related laws.

If the documents are NOT in compliance, the borrower has several remedies depending on their situation. Recission of the loan, (meaning to reverse the transaction and make it as if it never happened), is a possibility, as is pursuing the lender for damages for each TILA/RESPA violation.

Loan audits are an excellent way to gain leverage against a lender for an equitable loan modification. Loan audits are increasingly being used to pursue lenders because many homeowners will not qualify for a modification under the hardship guidelines. Additionally, in many states such as California, getting a short sale approved by the lenders has become increasingly difficult.

Want more information on loan audits? Go here to get a FREE copy of our comprehensive guide to loan audits. After you download the guide, you’ll be invited to a FREE webinar and receive a FREE loan audit for attending.

Did You Pay Undisclosed Finance Charges at Closing?

Many borrowers unwittingly paid undisclosed finance charges at the time they closed their loans.

A prime example of undisclosed settlement charges is known at the Yield Spread Premium (”YSP”). The YSP was originally designed as a method to offset the costs of making a loan by placing the borrower into a loan with a interest rate higher than what the borrower would have otherwise qualified for.

The higher rate would involve the mortgage broker receiving a YSP, which would then be “gifted” to the borrower as a credit towards the buyer’s closing costs.

However, since its inception, the YSP has been completely misused. It is now used as a method for the mortgage broker to receive additional compensation for processing the loan.

This means that borrowers were paying for their own “gifted” funds with a higher interest rate! What’s worse is that most brokers never disclosed the truth about these gifted funds. 

Typically, if questioned, the borrower is told that the lender is paying for the YSP, not the borrower, which is in part true. However, the borrower is not fully informed that he/she is actually paying a higher interest rate than what they would have otherwise obtained.

How do you know if your broker received the Yield Spread Premium?

Sometimes you can’t tell outside of litigation. Many times brokers did not disclose the Yield Spread Premium on the settlement documents.

That means your broker could have received payments without your knowledge, outside of closing. In fact, this happened quite frequently. I’ve spoken to many former mortgage brokers who have told me that they usually received large commissions from lenders outside of closings.

The law provides that rescission is possible and damages are triggered if any mortgage broker fee was not included in the closing documents as a finance charge.  15 U.S.C. § 1635 (i) (1)(A). In other words, these payments were undisclosed settlement charges and thus, likely a violation of the Truth In Lending Act (“TILA”).

If the broker actually disclosed the YSP, it usually appears on the first or second page of the HUD-1 received at the closing of your loan.

Alternatively, a loan audit can help you pick out this and other predatory lending patterns in your mortgage documents.

What Are the Signs of Predatory Lending?

There are several warning signs of a predatory lender. Although loans with the following signs are not always predatory, they often appear in predatory loans.

High Interest Rate. National figures show that predatory lenders charge much higher interest rates than other lenders.

Excessive Points, Late Charges and Prepayment Penalties. Loan origination fees and other charges can cost thousands of dollars. Predatory lenders often charge these in the documents you sign even though they tell you that you are not paying any. The Yield Spread Premium is a good example. Prepayment penalties may make it very costly or impossible for the borrower to refinance or sell their home.

Credit Insurance Packing.  The lender adds credit life insurance or credit accident or disability insurance to your loan, which you may not need. Such insurance premiums may cost thousands of dollars and you may be charged interest if they are added to the amount of your loan. The lender may tell you that this insurance comes with the loan, making yu think you aren’t paying for it or that you have to buy it. This insurance often has limitations and time restrictions but is still sold to people who don’t qualify for the coverage because lenders make a lot of money on these policies.

Asset-Based Lending. The lender gives you a loan based on the equity in your home, not on your ability to repay or on your income. The lender may encourage you to “pad” your income to give the impression that you can afford the new loan or may get inflated appraisals on your home. They may lend you more money than you can possibly afford to repay because there is a large amount of equity in the property. When they foreclose on your home, predatory lenders may get the full amount of equity even if their loan was small.

Misrepresentations. The loan officer or lender may offer you one set of loan terms and then change them at closing. They may also misrepresent the terms of the agreements you signed.

Loan Flipping or Multiple Refinancing. The loan officer or lender may tell you it is time to let the equity in your home start “working” for you. They may encourage you to refinance the loan repeatedly and often to borrow more money. Each time you refinance, you pay additional fees  and points and if the loan has a prepayment penalty, you may have to pay that penalty each time you take out a new loan.

Balloon Payment. A large sum of money that is beyond your ability to pay is due at the end of the loan. If you can’t make the balloon payment or get a new loan to pay it, you face foreclosure and the loss of your home.

High Closing Costs. Unusually high closing costs, such as appraisal fees or document preparation fees are included in the loan, and you must pay interest on these costs.

Deceptive Loan Servicing. The lender doesn’t provide you with accurate or complete account statements and payoff figures that makes it almost impossible for you to determine how much you have paid or how much you owe.

Loan Broker Fees. Often people contact a loan broker thinking the broker works for a mortgage company. The loan broker arranges the loan with a mortgage company and  then charges a large commission fee that comes out of the loan proceeds, often without the homeowner knowing anything about it.

Discrimination. The lender charges a woman, older adult or minority consumer more than a similar consumer who is not a member of that group.

Stop Payment Advice. The lender or broker tells a consumer not to make payments on existing loans before the new loan closes. At the closing of the new loan,  the terms are not as promised and the consumer may have difficulty finding another lender because his existing loans are in default.

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