Lenders Being Legally Challenged for Activating Predatory Lending
October 27th, 2009
Right across the nation individuals as well as groups of sufferers are legally challenging the lenders for activating predatory lending that ultimately led to the foreclosure crisis.
Wells Fargo is facing such suits because one of the banks Wells Fargo has lately taken over started the option ARM loans. By these the borrowers start off by making extremely low monthly payments. Later the interests that have not been paid were added to the principal. Currently under the cloud of recession many are defaulting.
The aim of the legal suit against Wells Fargo is to make the bank restructure its mortgages so that the borrowers can afford them. The homeowners are on the lookout for a second chance. Damages are also being sought by the suit – especially from those who had either lost their homes or paid of their mortgages at an unjustifiable high rate. Wells Fargo is trying to have this case dismissed on the ground that the claims lack base – it being wrongly characterizing the bank’s long standing fame as being a responsible lender.
Attorney Generals of many states are similarly filing cases against some of the mortgage giants alleging that improper lending practices had been followed. Banks are now feeling the sting of these increasing numbers of suits from NAACP. Some of the city officials as well as individuals are bringing in suits alleging that the banks had discriminated against the minorities while granting loans.
Martha Coakley the Attorney General of Massachusetts has reached a settlement amounting to $10 million last June with Fermont Investment & Loan for its unfair dealings in sub-prime mortgages. The state will disburse $5 million to those who had taken these loans from Freemont. Another amount of $3 million would be spent for foreclosure relief and education of home owners. The balance would be taken by the state to cover the costs. Meanwhile Fermont assured that it would proceed with more loan modifications and refrain from foreclosing on 2,200 additional loans without first giving notice to the office of the Attorney General and then following it up by getting the green signal from the court in some cases.
Following the settlement Martha Coakley said, “The American dream of homeownership has turned into a nightmare for many borrowers because of predatory lending practices. We will continue to hold companies responsible for their role in the foreclosure crisis.”
- Bouncing Cheques Issued by Title Companies Lead to Foreclosures
- Increase in Foreclosures Prompting Class Action Legal Suits
- Avoiding Foreclosures by Walking Away From Loans are not Without Problems
- Foreclosure Assistance Being Taken on Tour by Housing Advocate
- Washington Mutual, the Symbol of the Foreclosure Crisis, Continues to be in Trouble
- The Consequences of not Paying Mortgages Can be Grim
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October 28th, 2009 at 12:39 pm
[...] in a foreclosure ever want to go anywhere near the process once again – not the borrowers, or lenders or the judges presiding over the cases. The civil courts are clogged with staggering number of [...]