Massapequa Real Estate Attorneys
What Is Predatory Lending?
Between 2005 and 2008, predatory lending became a serious problem throughout
Nassau and Suffolk Counties. In order to rectify this abusive practice,
the Federal Government set up a loan modification program. The New York
legislature also started establishing mandatory settlement meetings in
foreclosure suits, called CPLR 3408 conferences. These conferences require
the lender to negotiate, in good faith with the borrower, about the terms
of the loan.
- Predatory lending involves a variety of unscrupulous lender practices,
which can include:
- Saddling the borrower with a loan that he or she cannot afford
- Charging excessive fees and interest, making the final monthly loan payment
much more than the initial agreement
If you have been victimized by predatory loan practices, you are urged
to contact a Massapequa real estate lawyer who is skilled in
foreclosure and predatory lending defense to help you achieve a just resolution. Call
James J. Quail & Associates, P.C. at (516) 246-2449 for more information.
Predatory Lending Practices Defined
- Predatory lending practices can be defined as:
Charging excessive fees: As fees do not have to be included in the stated interest rate, lenders
would bury them in the fine print when presenting a loan proposal.
Oppressive steering: Some borrowers qualifying for economical prime rates were directed to
buy expensive subprime rates.
Kickbacks: Brokers selling loans for more than the lender actually required were
rewarded with kickbacks from the lender.
Unnecessary refinancing of loans: In a practice known as “flipping,” some brokers would persuade
borrowers to needlessly refinance their loans so the broker could earn a fee.
Loaning to unqualified borrowers: Lenders knew from the debt-to-loan ratio that the borrower would eventually
default but went ahead with the loan anyway to earn the fees and resell
the loan to an unsuspecting investor.
Disguised high payments: Lenders would lure in borrowers with low introductory payments. The payments
would then jump beyond the borrower’s ability to pay.
At James J. Quail & Associates, P.C., we are well-versed in predatory
lending practices and how to protect our clients from them. We provide
you with the powerful legal representation that you need if you have been
the victim of predatory lending. Contact our firm today to
schedule a free 15-minute consultation.