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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 30-minute consultation.

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