Mortgages and Loans

Buying or refinancing your home may be one of the most important and complex financial decisions you'll ever make. Many lenders, appraisers, and real estate professionals stand ready to help you get a nice home and a great loan. However, you need to understand the home buying process to be a smart consumer. Every year, misinformed homebuyers, often first-time purchasers or seniors, become victims of predatory lending or loan fraud. Don't let this happen to you!

You have the right to be free from predatory lending practices.  The federal Truth in Lending Act (“TILA”) protects consumers from overcharges and other undisclosed “costs of credit”.  Other federal lending laws such as the Equal Credit Opportunity Act (“ECOA”), which protects against credit discrimination, and the Real Estate Settlement Procedures Act (“RESPA”), which prevents kickbacks and bait-and-switch lending, exist to help borrowers in the often complex area of loans and consumer lending.  Several state laws also provide protection for borrowers.

If you’re the victim of a bait and switch, in Pennsylvania or New Jersey, non-disclosure of material terms, overcharges and fees, or other predatory lending practices, we may be able to help.  CONTACT US to discuss the specific issues of your home purchase or refinance.

Protect Yourself from Predatory Lenders

Eleven tips on being a smart consumer
(source: http://www.hud.gov/offices/hsg/sfh/buying/loanfraud.cfm)

  1. Before you buy a home, attend a homeownership education course offered by the U.S. Department of Housing and Urban Development (HUD)-approved, non-profit counseling agencies.
  2. Interview several real estate professionals (agents), and ask for and check references before you select one to help you buy or sell a home.
  3. Get information about the prices of other homes in the neighborhood. Don't be fooled into paying too much.
  4. Hire a properly qualified and licensed home inspector to carefully inspect the property before you are obligated to buy. Determine whether you or the seller is going to be responsible for paying for the repairs. If you have to pay for the repairs, determine whether or not you can afford to make them.
  5. Shop for a lender and compare costs. Be suspicious if anyone tries to steer you to just one lender.
  6. Do NOT let anyone persuade you to make a false statement on your loan application, such as overstating your income, the source of your down payment, failing to disclose the nature and amount of your debts, or even how long you have been employed. When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete. Lying on a mortgage application is fraud and may result in criminal penalties.
  7. Do NOT let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property.
  8. Never sign a blank document or a document containing blanks. If information is inserted by someone else after you have signed, you may still be bound to the terms of the contract. Insert "N/A" (i.e., not applicable) or cross through any blanks.
  9. Read everything carefully and ask questions. Do not sign anything that you don't understand. Before signing, have your contract and loan agreement reviewed by an attorney skilled in real estate law, consult with a trusted real estate professional or ask for help from a housing counselor with a HUD-approved agency. If you cannot afford an attorney, take your documents to the HUD-approved housing counseling agency near you to find out if they will review the documents or can refer you to an attorney who will help you for free or at low cost.
  10. Be suspicious when the cost of a home improvement goes up if you don't accept the contractor's financing.
  11. Be honest about your intention to occupy the house. Stating that you plan to live there when, in fact, you are not (because you intend to rent the house to someone else or fix it up and resell it) violates federal law and is a crime.

 

Our Client, a Victim of Mortgage Fraud, is Welcomed to the White House

A number of our consumer protection cases have gained national attention over the years, but none more than our litigation on behalf of Karen Cappuccio of Hellertown, PA whom we represented in a case against Countrywide Mortgage, which is now owned by Bank of America. On October 9, 2009, Karen was invited to the White House to discuss her story with the President of the United States.

 

As part of his national press conference on Consumer Financial Protection, President Obama pointed to Karen's case as a blatant example of predatory lending and added that Karen was forced to fend off foreclose  because "her mortgage company duped her into taking out two expensive loans when they had originally promised her one low, fixed-rate mortgage." The President's remarks, including his mention of Karen, can be viewed at http://www.youtube.com/watch?v=fwbqmZpSXho

 

In 2006, Karen applied to refinance her home mortgage with low-interest, fixed rate loans.  However, her application was later altered without her knowledge and she was placed in high-interest, variable rate loans.  We helped Karen fight the banks that put her in the position of having loans she did not want and loans she could not afford.  Karen’s case went to trial, where a jury awarded her a verdict under the federal Equal Credit Opportunity Act and Pennsylvania’s Consumer Protection Law. 

 

picture of cappuccio with obama.jpg

Pictured is our client, Karen Cappuccio (seated fourth from left), meeting with President Obama to discuss her experiences as a victim of mortgage fraud.  President Obama referred to Karen’s situation during his press conference on October 9, 2009 about establishing a new Consumer Financial Protection Agency.