Predatory Lending: Borrowers Fight Back
Law.com reports that individual borrowers are taking preemptive action against their lenders by suing over deceptive lending practices. The story, “Saying They Were Tricked, Borrowers Fight Back With Lawsuits,“ is by John Pacenti of the Daily Business Review.
We have previously commented on New York cases where the tables were turned on lenders who had started foreclosure proceedings here and here. And, state regulators in various states are suing major lenders over general practices.
The Law.com report involves cases from around the country that are different from the New York cases because the individual borrowers are not waiting for foreclosure proceedings (and may not be at risk of foreclosure). Nor, are they waiting for state regulators to sue. Instead, the borrowers are starting the lawsuits.
According to the Law.com report, borrowers complain of practices typical of predatory lending, such as: the lender telling customers interest rates were fixed when they were adjustable, misrepresentations about the length of the loan and teaser rates where rates, in the long-term, are higher. At stake: damages that may include: reimbursement of all mortgage payments, finance charges and interest plus attorneys’ fees and costs.
Some of these suits are apparently supported by organizations formed to help borrowers, such as the Affirmative Defense Group of Margate, Florida mentioned in the Law.com report.
individual borrowers who are not supported by an organization may have some tough choices to make, drawing on their emotional strength and financial resources, in order to fight back.
But, with their homes at stake, it may be a necessary choice.