Mortgage and Real Estate Fraud
We represent people who have been the victim of fraud, incompetence, and shady dealing in the mortgage and real estate industry. The wrongful conduct takes many forms, ranging from developers colluding with appraisers to generate inflated appraisals to unscrupulous real estate and mortgage brokers setting up loans that they know (or should know) the borrower will not be able to repay. A common thread is often a betrayal of trust by professionals who were chasing quick profits rather than looking out for the homeowner.
Generally speaking, California real estate and mortgage brokers owe their own clients a fiduciary duty of fair dealing, full disclosure, and utmost integrity and as well as a basic duty of professional competence. Sellers of real estate and their agents have duties to behave honestly and disclose important facts that affect the value of the property. Lenders have obligations under state and federal laws to make clear up–front disclosures regarding the terms of a loan, to avoid engaging in predatory lending practices, and to behave in a decent and responsible manner when collecting a debt or foreclosing on a property.
You don’t need to know the laws. That’s our job. If you feel you have been betrayed, misled, or given bad advice by a real estate or mortgage professional (or someone who claimed to be), you may have a claim, and we would be glad to take a look at it for you at no cost.
If you think you have a claim, or related information, please contact us.
How to Spot Predatory Lending
In communities all across the country people are losing their homes and their investments because of lenders, appraisers, mortgage brokers and home improvement contractors who:
- Sell properties for much more than they are worth using false appraisals.
- Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.
- Deliberately lend more money than a borrower can afford to repay.
- Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
- Charge fees for unnecessary or nonexistent products and services.
- Pressure borrowers to accept higher–risk loans such as balloon loans (loans with initial low payments and a huge payment due later), interest only payments, and steep pre–payment penalties (money charged for paying off the loan ahead of schedule).
- Take advantage of borrowers in need of cash due to medical, unemployment or debt problems by offering cash–out refinance offers.
- “Strip” homeowners’ equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.
- Use high pressure sales tactics to sell home improvements and then finance them at high interest rates.
What Tactics Do Predators Use?
- A lender or investor tells you that they are your only chance of getting a loan or owning a home. You should be able to take your time to shop around and compare prices and houses.
- The house you are buying costs a lot more than other homes in the neighborhood, but isn’t any bigger or better, or you couldn’t resell at about the same price in the future.
- You are asked to sign a sales contract or loan documents that are blank or that contain false information.
- You are told that FHA insurance protects you against property defects or loan fraud—it does not.
- The cost or loan terms at closing are not what you agreed to.
- You are told that refinancing can solve your credit or money problems.
- You are told that you can only get a good deal on a home improvement if you finance it with a particular lender.