Self Help - Predatory Lending

Please Note



Nothing on this web site should be viewed as creating an attorney-client relationship between you and our law firm, or any of our attorneys. The information here is general in nature and should not be viewed as applying to your specific circumstances. Only a qualified consumer rights attorney can advise you about your specific situation. Hyde & Swigart are California consumer rights attorneys. State laws, and the interpretation and rulings on federal laws, are different in each jurisdiction. If you feel you need consumer rights legal advice, contact Hyde & Swigart at (619) 233-7770 for a free consultation.

It is the opinion of Hyde & Swigart, that if you believe you are being, or have been, a victim of predatory lending, you need the advice of an attorney dedicated to advocating for you and your consumer rights. That is what we do at Hyde & Swigart. We don’t charge you to discuss your case, and we don’t charge you attorney fees or costs unless we prevail on your behalf. If you have been victimized by a lender or broker, you need not fear calling us. We will listen to you, tell you if you have a case, and give you some options - all at no charge. If you feel your rights are being violated, we urge you to call us at (619) 233-7770 for a free consultation.

However, there are things you can do to guard against or deal with predatory lending issues. Even if you eventually intend to call a consumer rights attorney, these steps will probably help your case.

(1) Figure out what you can afford and stick to it.

There are a lot of financing options out there designed to convince you that you can afford more than you can really afford. Do not fall for it. Here is a way to calculate what you can really afford in home payment: (Click Here)

(2) Factor in tax breaks.

Mortgage interest and property taxes on homes are typically deductible. Calculate out what you will save on your taxes every year

(3) There is no such thing as a good 2% loan.

Do not be sucked into promises of loan rates that are unrealistic. You do not get things for nothing, and if someone promises you something that sounds too good to be true, it is almost certainly to good to be true. If the going rate for a home loan is 7%, and someone tells you they can get you a home for even 5%, much less 2%, be skeptical. Be extremely skeptical. Ask yourself why others must charge 7% when this guy only needs to charge 5%.

(4) Do not falsify your loan application.

The goal is not to buy a house. The goal is not to buy the house that you have always wanted. The goal is to buy a house that you can afford and that fits your needs. The reason lenders ask for your income information, what you owe, etc., is because they want to be sure you are not putting yourself in a position where you can not afford to pay the loan. Isn't that what you want, too? Do not convince yourself or let an agent convince you that you can afford more than you really can.

(5) Run, do not walk, if you are asked to do the following:

Leave signature lines or any other important line-item of any form blank. Did the lender or broker alter any information you entered on your loan application? If so, call us.

(6) Get all the paperwork you are entitled to and read it. This includes:

Good Faith Estimate
Special Information Booklet
Truth in Lending Statement
HUD-1 Settlement Statement

(10) Consider renting.

If you are looking at purchasing a home, the idea of renting is probably not something that you want to think about. That may be a mistake. Sure you want the pride of ownership, the potential gains from the rising value of property, the financial advantages of the special tax deductions, and the stability of owning a home, but if you can not afford what you want, how proud will you be? If you lose your home after a year or two because you over extended, this is no financial advantage. And there is nothing stable about constantly worrying about how you will make next months mortgage payment. Further, with renting you have fewer responsibilities, maintenance and repairs are handled by the owner, there is no large down payment, only a security deposit, monthly rent are fixed making it easier to budget, there is no chance for financial loss of investment, and you can look over the community and purchase when you are in a better financial position, when the market is better, or when financing options are more favorable.