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Legal/fincancial resources due to predatory loan/bad credit?

Posted on: 09th Jan, 2007 03:27 pm
i have a predatory arm mortgage in which i didn\'t know the terms were switched until 2 hours into closing when i found out i did not have a fixed rate. i fell behind in while between jobs in sept and my rate adjusted. the mortgage company would not allow partial payments. now i have another full time job as of sept but behind 2 payments. going through acorn was able to set up a repayment plan but the mortgage company knew my income was not enough for the payment plan (i also had interest rate adjustment to 11.9% in sept. i have a 36 month prepayment penalty clause (up in august)..question is my credit is shot, i don\'t use credit cards and with the mortgage company reporting to the credit bureau, no loans or help is available. i\'m at a point of losing it all or being foreclosed due to 2 payments included in my already 1268.00 month payment...do i throw in the towel? i have researched all the social service agencies, foreclosure prevention, loans, refinance, equity, personal, but because i cannot raise the 2600.oo am pretty much screwed. not to mention the repayment schedule does not allow me to pay for anything else.. i\'m looking for another job in addition, but my time is running out,,how can i rent or do anything with such a poor credit rating since whatever you do is dependent upon one\'s credit scroe, whether housing, insurance, etc.
Hi Cathy,

The situation you are in really difficult but certainly you would be able to recover out of it. Consult foreclosure prevention counseling agencies in your region and they will try to make the mortgage company defer the payment of $2600 for some time until you get a better job.

I am sure that would be possible.

David
Posted on: 09th Jan, 2007 04:07 pm
I don't know how this site works and if I can respond...BUt I have done that with the foreclosure programs and they ended up not being able to help with the agency that they kept referring me to that kept putting me off and said to contact them later and when I did for the 3rd time, said that there is nothing they can so since I had a repayment plan in place...I was ticked to say the least and I was able to get a better job in Sept but of course was struggling to make ends meet and fell behind and cannot catch up..Looking for additional work primarily for added income but actually the payments are made Jan-April.
Posted on: 09th Jan, 2007 04:11 pm
Did you file any complaint for the mortgage being switched and you being provided an ARM instead of a fixed rate one?

Having an ARM is the main reason you are in such deep trouble.

Loan Advisor
Posted on: 09th Jan, 2007 04:27 pm
I turned in a comp[laint with the atty general;'s office, but the moprtgage originator is missing in action of course and I did not file a complaint at the time hoping it would work out,,,plan on contacting the commerce dept but with no laws for protection and at this time, they are registering complaints,. i feel it is futile for those in the spot now, maybe for those in the future if any legislation gets passed against fraudelant / predatory loan practices.
Posted on: 09th Jan, 2007 04:44 pm
Hi Cathy,

Welcome to our forums.

First of all, if you have not received any help from the Attorney general's office, then you should file a complaint with the Better Business Bureau (BBB) or the Federal Trade Commission (FTC). You will get the complaint form of FTC at https://rn.ftc.gov/pls/dod/wsolcq$.startup?Z_ORG_CODE= . It' important because you should not suffer just because the lender has replaced your loan.

From what you have mentioned, I understand that you will not be able to make payments from January to April. I doubt whether your lender will agree to wait for 4 months. Most lenders allow for a period of 3 months before they actually start foreclosure.

Now, if the complaint that you file with BBB or the FTC does not work out, then you need to make arrangements to save your home. Since you have been to various social agencies but without any help as such, I feel it will not be the right way for you.

If you are able to find out a second source of income within a few days, you can request the company to suspend payments for some more time. You can then convince them by informing them about your sources of income.

However, if this doesn't work out, then you may request the lender for a short sale. By a short sale I mean, you can request the lender to allow you to sell the property so that you may pay off the loan with the sale proceeds while the lender may forgive a part of the debt. But before you go for a sale, try to find out a rented home for yourself.

I know it's hard to lose a home but at times we do have to take decisions which can help us get out of troubles in future.

Feel free to let us know what feedback you received from the the FTC or BBB. Also, let us know what your lender say, whether he is willing to suspend your payments. Depending upon your situation, our community may be able to give you some more suggestions.

Thanks,

Caron.
Posted on: 09th Jan, 2007 09:06 pm
I assume the broker is the one that switched you from what you thought was a fixed rate to an ARM. You surely signed ARM documents at closing and if it was a refi, had 3 days to back out. A lot of unscrupulous brokers pull a bait and switch at the table. The fact you signed the documents is a problem, but what I would do is call the Lender's compliance department and ask if they are still doing business with the specific broker and how many complaints they have with him/her. A lender has a responsibility to deal with reputable brokers and if they have had problems with this broker you may be able to negotiate froma a position of strength. Let them know you are going to make a hobby of getting them to deal with legitimate brokers by filing complaints against the lender with the FTC, the state AG and banking commission and HUD. The broker acts as a defacto agent for the lender and is in essence acting in their behalf.
Posted on: 11th Jan, 2007 08:48 am
Yes DZ, until and unless someone complains against lenders doing business with such brokers, none can put an end to predatory lending in the industry. But suppose if the FTC takes into account Cathy's problem, will it take action against the lender also? I believe it should be done because if he is doing business with the broker, he may be knowing about the way the broker deals with such transactions.

Sara
Posted on: 12th Jan, 2007 12:46 am
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