07 Nov 08 Truth in Lending Violations, Predatory Lenders and Forensic Loan Audits

The Truth In Lending Act also called TILA and the Real Estate Settlement Procedures Act, also called RESPA are frequently violated by mortgage lenders across the country. Predatory lending continues to be practiced by reckless mortgage brokers and careless lenders. These lending laws were created to protect consumers against predatory lenders; however a lot of flagrant violations continue to occur today. Homeowners need to request a forensic loan audit from the loan modification company. The Legal Loan Relief performs a forensic audit when our mortgage relief clients first comes on board because uncovering lending violations can expedite loan work-outs, forbearance and sometimes principal reductions.

The penalties for failure to comply with the Truth In Lending Act can be substantial. Banks who violates the disclosure requirements can be sued for two times the amount of the total amount financed over the life of the loan. In the case of a home mortgage, this can be a very significant amount. In most cases, lawsuits must brought on by the consumer within 1 year of the violation, but certain courts have been known to consider predatory lending cases up to 3 years after the violation. If you are facing the prospects of foreclosure, uncovering Truth In Lending Act violations can delay and even stop the foreclosure process.This term can apply to all aspects of the mortgage industry and refers to the practice whereby a creditor put a borrower into a loan that the borrower will probably not be able to repay. Federal laws like the Truth In Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”), as well as many state laws, require that creditors disclose certain terms of loans to borrowers, and when those terms are not disclosed or are inaccurately disclosed these laws provide severe monetary penalties against these creditors.