Predatory Lending? How to Sue a Mortgage Company Explained
Homeownership is the ultimate dream for many people. Unfortunately, some mortgage companies take advantage of this and engage in predatory lending practices that can turn that dream into an absolute nightmare, so many may wonder, “can I sue mortgage company?” “how do I sue my mortgage company?” or “what are reasons to sue a mortgage company?”. Not only can predatory lending leave borrowers trapped in high-interest loans, but they’re also saddled with unfair terms.
This can (and usually does) result in financial hardship, stress and even the loss of their homes. If you or a loved one have been a victim of predatory lending, you’re not alone. At Ziegler Diamond Law, our consumer protection attorneys are here to help you understand your rights and take the appropriate legal steps to protect yourself financially.
Depending on your circumstance, we may be able to help you get a full discharge of any illegal debts, negotiate a structured payment plan or even pursue legal action against predatory lenders. Don’t wait until it’s too late to save your finances.
Contact us today for your free initial consultation with an attorney you can trust.
Understanding Predatory Lending
When companies practice predatory lending, they undermine the fairness and opportunities that should otherwise exist in the mortgage market. That’s why it’s very important to recognize businesses who use these tactics to take advantage of some vulnerable borrowers.
What Is Predatory Lending?
Predatory lending is a broad term that can be defined as any lending practice that puts the lender’s interests ahead of the borrower’s well-being. Generally, the tell-tale signs of these kinds of companies usually include unfair, deceptive or even fraudulent practices that exploit borrowers – And unfortunately, trap them in a cycle of debt they can’t afford to repay.
Due to the nefarious nature of these kinds of mortgages, predatory lenders usually target people who are financially desperate or lack the knowledge to properly assess the risks of signing an unfair loan agreement. You have to be aware of: “Can you sue a mortgage company?”, “How to sue a mortgage company?” etc.
Signs of Predatory Lending
The good news is there are ways to avoid these abusive loan practices: The first, and most effective way is to recognize the red flags before agreeing to terms with these greedy and often unscrupulous mortgage companies. Here are a few signs that can help you avoid predators in the mortgage market:
- High fees and interest rates: In many cases, predatory lenders charge excessive fees and incredibly high interest rates that go well beyond normal market rates – Which can make it nearly impossible to keep up with payments.
- Balloon payments: Large lump-sum payments that are typically due near the end of the loan term. This can lead to scenarios where a borrower feels forced to either refinance or go through foreclosure.
- Pressure tactics and deception: An old trick where the lender tries to rush you into signing, lie to you about the terms or intentionally hide information that’s buried deep in the fine print.
- Targeting vulnerable borrowers: Abusive lenders usually set their sights on people who have poor credit scores, are in an extreme situation or those who don’t 100% understand what they’re signing up for.
- Equity stripping: It may sound like a good idea to refinance, but in many cases, predatory lenders push borrowers to do so, while adding new fees each time. Essentially, this drains your equity in your home and enriches the lender at the same time.
- Prepayment penalties: High fees for paying the loan off earlier than agreed. This makes it even harder for a borrower to actually build equity or escape the clutches of the loan.
Important: If you’ve observed even one or two of these characteristics in a potential lender, it’s in your best interest to be cautious and seek help from a proven predatory lending attorney in Florida as soon as possible.
Legal Grounds for a Lawsuit
If you’ve been the victim of illegal lending tactics, you may be wondering, “can I sue my mortgage company for predatory lending? The good news is, that you may indeed be eligible to file a lawsuit.
For starters, there are many federal and state laws that help to protect borrowers from unethical and harmful lending practices. So, what are reasons to sue a mortgage company? Generally, the most common legal grounds to sue mortgage company for predatory lending include but aren’t limited to the following:
- Truth in Lending Act (TILA): This federal law makes it mandatory for mortgage companies to disclose the full and true costs of a loan. This can include interest rates, fees, and other terms. If you think your mortgage lender violated TILA disclosures, you may have a solid foundation for a lawsuit.
- Home Ownership and Equity Protection Act (HOEPA): This specifically targets those high-cost mortgages while providing much needed protections for borrowers. It’s important to note that HOEPA loans must adhere to much stricter regulations. Violations of these rules can result in very serious consequences for lenders.
- State and Local Consumer Protection Laws: Florida’s consumer protection laws share similarities with other states, but also have many differences. It’s important to reach out to your attorney to understand how consumer protection laws in the state can apply to your case.
- Other Federal Laws: Depending on your situation, other federal laws might apply, including The Real Estate Settlement Procedures Act (RESPA) which protects you from kickbacks and certain fees. Further,The Equal Credit Opportunity Act (ECOA) helps to protect you from discriminatory lending practices that are based on your race, gender, religion, etc.
If you’re thinking about pursuing legal action against your mortgage lender, it’s important to move as fast as possible because you’ll need to file your case before the statute of limitations expires.
How an Attorney Can Help
In most cases, it’s in your best interest to hire a lawyer to sue mortgage company. Why? Because the mortgage company will work with a high-powered law firm. Therefore, if you don’t, you’ll be at a distinct disadvantage. Additionally, your attorney can:
- Analyze your Case: This includes examining your loan documents, circumstances of your cases and identifying specific violations of laws and regulations.
- Navigate Complex Regulations: An attorney can guide you through the ins and outs of complex predatory lending laws at the federal, state and local levels.
- Build a Strong Argument: Including evidence collection, negotiations with your lender, case law precedent and more, to help you build a solid case.
Evaluating Your Situation
Before embarking on any legal action, it’s crucial to assess your situation thoroughly. Here’s where a little detective work goes a long way. By closely examining your loan documents and gathering evidence, you can determine if you’ve been a target of predatory lending practices.
Our consumer attorneys at Ziegler Diamond Law are here to guide you step-by-step through the investigation process. That way you can make an informed decision about your path forward. When you work with us, our thorough evaluation will include:
Assessing Your Mortgage
One of the first steps we’ll take is to carefully review your mortgage documents. This will include putting a magnifying glass on your interest rate, fees and your repayment schedule. Next, we’ll compare your terms with the current market standards. This helps us understand whether your terms were typical and legal at the time you signed your mortgage.
Gathering Evidence
In most cases, the outcome of your case greatly depends on the strength of your evidence. Thus, if you want to successfully sue mortgage company, your attorney will need to comb through the finer details – Which can include:
- Loan documents: Contracts, disclosures and any communication with the lender.
- Financial records: Proof that the predatory loan caused you financial hardship.
- Witness statements: Anyone who witnessed or experienced pressure tactics or misrepresentations from your lender.
Steps to Take Before Filing a Lawsuit
Taking on a mortgage company in court is a major decision that comes with endless considerations and preparatory steps. Generally, you should follow these steps before thinking, “how do I sue my mortgage company?” or “I want to sue my mortgage company” for predatory lending practices:
1. Seek Expert Guidance
A debt lawyer who has an in-depth understanding of predatory lending can be one of your most valuable assets. During your free consultation you can expect us to:
- Analyze your mortgage documents and spot potential legal violations.
- Give you clear explanations about your legal options (i.e., negotiation tactics, regulatory complaints, etc.).
- Provide valuable insights into potential challenges you might face and the best ways to address them.
2. Organize Your Evidence
When it comes to mounting a successful predatory lending case, you’ll need to gather and organize essential documentation. That includes:
- Loan Documents: Contracts, disclosures, closing statements and any other forms of correspondence with your lender (e-mails, transcripts, letters, etc.).
- Financial Records: Proof of financial hardship caused by the loan (e.g., increased expenses, loss of income and more).
- Witness Statements: Written and/or record accounts from individuals who observed suspicious or deceptive behavior displayed by your lender.
- Regulatory Complaints: Copies of the complaints you may have filed with relevant agencies (if applicable).
Generally, your attorney can help you gather documentation as well. However, the more you can provide upfront, the better.
3. Explore Negotiation (Optional)
Sometimes, it can be incredibly helpful to proactively reach out to your lender to express your concerns and potentially reach a resolution. If you believe it was a simple error or miscommunication, outline your issues in a letter and offer your proposed solutions.
While you don’t necessarily need an attorney to do this, it’s highly recommended. Your lawyer can ensure that your letter references applicable laws as well as asserts your rights to fair lending practices.
4. Consider Filing Complaints
Alerting regulatory agencies like the Consumer Financial Protection Bureau (CFPB) or the Florida Office of Financial Regulation can add significant weight to your case. Taking these steps before going to court not only puts more pressure on lenders to treat you fairly, but it also shows the courts that you made “good faith” efforts to resolve the situation – Which can greatly strengthen your position if legal action becomes necessary.
Process of Filing a Lawsuit Against Your Mortgage Company
If you and your legal representation agree on proceeding “sue mortgage company”, you can expect the following steps in the process:
- File a Complaint: Your attorney files a formal legal document that outlines your claims against the lender.
- Discovery Phase: This step includes both sides (you and the lender) exchanging evidence and information that’s relevant to the case.
- Negotiation or Mediation: Sometimes negotiations are easier when there’s an active case. Further, mediation can be a helpful tool (whether it’s voluntary or court ordered) when you’re trying to reach a settlement agreement.
- Trial: If you and the mortgage company can’t come to terms, then the case will most likely proceed to court.
Possible Outcomes and Remedies
In the worst case scenario, the court rules in favor of the mortgage company – Which could lead to foreclosure, bankruptcy and more. In best case scenarios, your attorney may be able to help you:
- Modify the terms of your loan: Obtaining fairer interest rates and fees.
- Recover damages: Which includes compensation for your financial losses and/or emotional distress.
- Prevent foreclosure: Allowing you to keep your home and stopping seizure.
- Rescission of the loan: This can totally cancel the terms of your mortgage.
Contact the Attorney Debt Fighters
If you’re in the Tampa area (including Clearwater & Mt. Dora) and suspect you’re facing predatory lending practice, we’re here to help. Additionally, our attorneys can help you with all sorts of mortgage-related situations.
- Foreclosure: We won’t let your lender take your home without a fight. We can explore all available options to save your home. That even includes sue mortgage company for illegal foreclosure (when necessary).
- Stress and emotional distress: Predatory lending can take an incredibly heavy emotional toll on you. If your mortgage company’s actions have caused you undue stress, we’re here to help you seek maximum compensation.
- Explain your rights: We offer clear explanations of your legal rights as a borrower and help you make informed decisions about the best next steps.
Any legal battle “how to sue your mortgage company,” can be complex and intimidating – But you don’t have to face it alone. The attorneys at Ziegler Diamond Law are here to help. Contact us today for your free initial consultation with an experienced Florida debt attorney.
