What Is Predatory Lending?

Predatory Lending are abusive practices used in the mortgage industry that strip borrowers of home equity and threaten families with bankruptcy and foreclosure.

Predatory Lending can be broken down into three categories: Mortgage Origination, Mortgage Servicing; and Mortgage Collection and Foreclosure.

Mortgage Origination is the process by which you obtain your home loan from a mortgage broker or a bank.

Predatory lending practices in Mortgage Origination include:
# Excessive points;
# Charging fees not allowed or for services not delivered;
# Charging more than once for the same fee
# Providing a low teaser rate that adjusts to a rate you cannot afford;
# Successively refinancing your loan of “flipping;”
# “Steering” you into a loan that is more profitable to the Mortgage Originator;
# Changing the loan terms at closing or “bait & switch;”
# Closing in a location where you cannot adequately review the documents;
# Serving alcohol prior to closing;
# Coaching you to put minimum income or assets on you loan so that you will qualify for a certain amount;
# Securing an inflated appraisal;
# Receiving a kickback in money or favors from a particular escrow, title, appraiser or other service provider;
# Promising they will refinance your mortgage before your payment resets to a higher amount;
# Having you sign blank documents;
# Forging documents and signatures;
# Changing documents after you have signed them; and
# Loans with prepayment penalties or balloon payments.

Mortgage Servicing is the process of collecting loan payments and credit your loan.

Predatory lending practices in Mortgage Servicing include:
# Not applying payments on time;
# Applying payments to “Suspense;”
# “Jamming” illegal or improper fees;
# Creating an escrow or impounds account not allowed by the documents;
# Force placing insurance when you have adequate coverage;
# Improperly reporting negative credit history;
# Failing to provide you a detailed loan history; and
# Refusing to return your calls or letters.

Mortgage Collection & Foreclosure is the process Lenders use when you pay off your loan or when you house is repossessed for non-payment

Predatory lending practices in Mortgage Collection & Foreclosure include:
# Producing a payoff statement that includes improper charges & fees;
# Foreclosing in the name of an entity that is not the true owner of the mortgage;
# Failing to provide Default Loan Servicing required by all Fannie Mae mortgages;
# Failing to follow due process in foreclosure;
# Fraud on the court;
# Failing to provide copies of all documents and assignments; and
# Refusing to adequately communicate with you.

Many a client call me when its toooooo late however sometimes something can be done it would envolve an appeal and this application for a stay. Most likely you will have to pay the reasonable rental value till the case is decided. And … Yes we have had this motion granted. ex-parte-application-for-stay-of-judgment-or-unlawful-detainer3
When title to the property is still in dispute ie. the foreclosure was bad. They (the lender)did not comply with California civil code 2923.5 or 2923.6 or 2924. Or the didn’t possess the documents to foreclose ie. the original note. Or they did not possess a proper assignment 2932.5. at trial you will be ignored by the learned judge but if you file a Motion for Summary Judgmentevans sum ud
template notice of Motion for SJ
TEMPLATE Points and A for SJ Motion
templateDeclaration for SJ
TEMPLATEProposed Order on Motion for SJ
TEMPLATEStatement of Undisputed Facts
you can force the issue and if there is a case filed in the Unlimited jurisdiction Court the judge may be forced to consider title and or consolidate the case with the Unlimited Jurisdiction Case

2nd amended complaint (e) manuel
BAKER original complaint (b)
Countrywide Complaint Form
California stop foreclosure and get your own shortsale COMPLAINT
And in some cases an injunction is in order
Foreclosure injunction TRO
and a Lis Pendence

10 Responses to “What Is Predatory Lending?”

  1. vonowen at 6:03 am #

    thanks for sharing this.. it is very helpful

    Loan Modification

  2. alfrede hernandez at 6:15 pm #

    Yes sir Iam a vitim of predatory lending I think they broke every lending law to get me this loan. I have been trying to find help but seems like no one wants to fight the system.If you can give some direction of where to complaint . Thank you

  3. RT Belmonte at 10:42 am #

    Hello, I am looking for info regarding “Equity Recoupement” over the net and I was redirected to your web site. Can you please explain to me what it is. Also, I have clients in your state and I was looking to partner up with a law firm that specializes in foreclosures.

  4. RICKEY GRAHAM at 9:26 pm #

    It is evident that Predatory Lending, WAS & IS a conspiracy from our LAW MAKERS, known as our political society. There is no way that congress nor our federal agencies should have allowed these type of creative loan products to engage to our financial sopciety.

  5. Loan modifications ca at 12:14 am #

    Loan modifications ca are taking place in great numbers due to the rise of foreclosed real estates over the past year. It is advised to seek help from an attorney who has great experise to deal with a variety of issues during the modification process. They have a higher success rate than individual applicants.

  6. RICKEY GRAHAM at 10:08 am #

    There is no secret, that loan modification are illegal, and has been since the inception of the STATED INCOME era. The question is, who is the blame and who is to profit from an consortium platfrom consisting of our governmental agencies, politicians, lawyers, and financial insitutions. Leaving the OLD HOMEOWNER, to answer a fraudulent act.

    HOMEOWNER, the “STATED INCOME LOAN” were designed to leverage your assets for profit, so that you as homeowner can’t never qualify for a loan modifcation, and only be subject to the power that created and originated these type of loans.
    Note: You can not produce the truth of your financial, and expect to satisfy
    a modification requriement. If it taken a LIE, to induced into a loan, it will take a STATE INCOME LIE, to get you out.
    All loan modifications, has one major case of action, that is FAILURE TO DISCLOSE A MATERIAL FACT. There is no paragraph in the entire closing escrow documents, indicating YOUR RIGHTS OF STATUE OF LIMITATIONS
    for your defense, prior to you signing your closing loan documents.

  7. markdoyle4520 at 10:02 am #

    It is incredible to see just how out of touch our main stream media is.

    I have been researching the Mortgage predatory lending market for some time now, gathering a whole bunch of dirt on Angelo Mozilo, David Sambol, Kurland and others at Countrywide Home Loans. I uncovered more than a little dirt on Bank of America and its CEO Kenneth Lewis. But what moved me the most was coming across this Lone Ranger like character named David Merritt.

    This is a guy who got suckered into one of those Countrywide Predatory loans. He and his wife are first time home buyers who wanted to put 5 to 10 % down on their $729,000 home in Silicon Valley California – 2 miles from Yahoo headquarters, 4 from google and 5 from Apple.

    With just 2 days to remove their loan contingency, and with at least two other lenders ready to sell them a relatively decent mortgage, Countrywide talked them out of going with the competition by presenting a 1 to 3 percent, FHA Good Faith Estimate and declared: “if you can find someone to beat this loan, then go with them and we’ll pay the closing costs.”

    Countrywide staff were trained on how to determine how much knowledge a home buyer had, and they knew that the Merritts were suckers to be taken. Once they fired the other lenders and committed themselves to Countrywide, the Merritts found themselves locked into a 100% financing Pay Option ARM and HELOC which was destined to charged them over 2 million dollars. Countrywide had a policy of talking buyers out of putting down payments, and convincing them that they would give them a loan that was better. In fact, they would always tell home buyers that No One Could beat them and the truth was that they did beat everyone at the application stage in order to remove all the competition, but they left out that by the time the home buyer was closing escrow, most competitors would have done better.

    The Merritts signed a loan that was charging twice as much as the average lender. What is more is that they signed a loan which Countrywide assigned Mortgage Electronic Registration System as a lender. As it turns out, MERS was designed to be a front company which allows: 1) Note holders to hide from public scrutiny; 2) the duplication of one loan note that could be sold off to 2 or more investors or mortgage backed security pools: 3) evasion of paying local recorder fees; 4) Overriding state legislatures recording the laws on recording liens, beneficiaries and holders in due course; 5) attacking Public Policy in regards to its goals of protecting consumers and lenders from fraud via recording laws; and last, but not least, 6) being a conduit for billions of dollars to pass right by Uncle Sam and into Cayman or Canadian banks where no federal taxes can touch it.

    This is how Countrywide rose to the top. And they intentionally targeted elderly, minorities and unsophisticated first time buyers.

    Now in July 2008 Bank of America bought Countrywide out for 2 billion dollars. A company with assets that exceeded 20 billion, and servicing machine that churned out billions more.

    Bank of America went to all the states Attorneys Generals and asked them to bring lawsuits on behalf of their state citizens against Countrywide and to already agree to cut a sweet settlement deal with Bank of America. This was a strategy to persuade that Public that BofA was sincere about cleaning up the mess Mozilo and cronies created. But what is left out is that they are also trying to cut off home buyers ability to charge BofA with the predatory loans of Countrywide.

    Behind the scenes, BofA has been supporting Countrywide since 1969. It has always been in the predatory loan business, but through other front companies. For the longest, evidence shows, Kenneth Lewis was very close allies with Mozilo and planned with him to defraud Americans out of their home equity.

    It is so strange to see so many Americans enslaved to the Banking and Finance gangsters and not even know it, or if they do, just accept it.

    David Merritt is literally one of the 21st Century modern epics “David versus Goliath.” And all the has is a little sling and a rock against Goliaths billion dollar war armor. Check out some of his thoughts on many issues at wordpress.com/insightbeyondsight, but the 9th Circuit Court of Appeals has before it Merritt v. Countrywide, BofA, Wells Fargo et al, Docket No 09-17678 where he has charged straight at these Greedsters with RICO and other federal violation. And in Santa Clara Superior Court Merritt v. Mozilo et al No. 109CV159993.

    He is actually looking for other victims who have deeds of trust assigned to MERS and he wishes to help in anyway possible to fight these folks offensively , he prefers, but he has enough information to help defensively as well. Lawyers from around the country taps into this Big David. So circulate the word.

    Mark Doyle

  8. Patrick Rodig at 12:27 pm #

    It’s amazing how they prey on the masses. We are victims of Deutsche Bank, MERS, Ocwen, and thier predatory lawyers. Improper assingments, post dated documents, forgeries and the worst is we were current and in the process of a modification when they foreclosed. The lawyers for Deutsche Bank told the judge basically “so what” we went this far, it’s not our concern. Fortunatly we are now in the drivers seat with a Federal Suit. See Rodig vs Encore Credit et al.
    In fact at settlement when we refi’d on 9/9/05 the clerk came to our house and every document was in error. He was supposed to return 9/12/05 for us to resign the corected doc’s and never did. They filed the fraudulent note, mtge etc after they forged our names on the doc’s.

    Now we are stuck with an Interest only ARM that we did not sign. However, in the Rule 26 disclosure provided by the defendents we uncovered an intercompany e-mail from the originating agent to several others that states “..the borrowers are to resign the note” and this is dated 9/14/05, 5 days after “settlement” Clear proof of the settlement fraud. There are hundreds of other illegalities involved, to numerous to name here. I can only say, where there’s MERS, there’s crime. The mortgage has been transfered countless times and now Ocwen Loan Servicing claims to be our mtge co. This is an impossibilty as a)they can’t by law service & own the note, b) I went to the county seat yesterday and there is no document to support this, The transfer of deed of trust was backdated in 2008 to make Deutsche Bank the mtge holder weeks after they initiated foreclosure.
    The Judge vacated the illegal Sheriffs sale on 6/16/10 and we just got a 1099A substitute form in which Ocwen claims they wrote off the mtge on 6/16/10 and that we abandoned the house?? Tax Fraud maybe.
    Where does this all end, in a revolution.

  9. my sob at 11:48 am #

    beware of Ron Castaneda and RESPA advisors, formerly in Santa Ana, now at 9227 Haven, Rancho Cucamonga, CA – fraud, illegally “capping” for and sharing fees with a lawyer (illegal); the lawyer is now NOT ELIGIBLE TO PRACTICE LAW (JAMES JOSEPH BROWN III) since March 2011. Ron has no education background and could never qualify as an expert; his staff has been filing improper Lis Pendens without underlying lawsuits. Ripped off clients of Castaneda/RESPA advisors/attorney Brown paid 10,000, 6,500 went to non-lawyer Ron. Neither Ron nor Brown will refund money, cannot show any substantial work done, and recently have refused to turn over file and documents in RESPA advisors’ possession to new attorney for one of their client/victims.


  1. How to Identify Predatory Lending « Birch Law Group Blog -

    […] Timothy McCandless Blog […]

Leave a Reply to my sob Cancel reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: