How to Stop Foreclosure Due to Lender Fraud

The housing crisis is on most on many American’s minds. Many homeowners were offered loans and received a mortgage due to the fraudulent practices of what is being called “predatory lending.” Homeowners’ holders received loans that they might not have been able to qualify for due to creative lending procedures that due to lender fraud. If you are facing foreclosure due to lender fraud and predatory practices, there might be help for you.

1. Educate yourself. Knowing the terms of your mortgage as well as the laws concerning what your lender can and cannot do will only benefit you in the long-term. Going through closing during the home buying process you are overwhelmed with paperwork and many time you do not read the fine print and the minutia of details included. Now is a good time to go back over all that paperwork and see just what you signed.


2. Remember and note any important aspects to verbal conversations you had with your lender. Again, the closing process is overwhelming. Your lender may have said things that you brushed aside that now make sense and you need to remember.


3. Seek out professional help. Financial counselors can offer you advice and answer many questions you might have once you are facing foreclosure. There are also websites available to the consumer and homeowner that will help you with the mortgage procedure and advise you if you feel you might be the victim of predatory lending. One such website is Real Estate Settlement Procedures Act, (RESPA). RESPA will assist homeowners with filing complaints against your lender. If, within a year of taking your mortgage you find your lender practiced predatory lending with you, you can file a civil suit.


4.  Contact HUD. Hud’s office of Fair Housing and Equal Opportunity is in the business of making sure that lenders use honest and fair business practices when dealing with their customers.


5.  File for an FHA refinance loan. Once you have determined that you were the victim of predatory lending, you can file with the Federal Housing Administration (FHA) for a refinanced loan to replace the existing loan you have. Many times the FHA will reappraise the house and the terms for the refinanced mortgage will be based on the new value of the home, not what the home was valued at the time of the initial loan.