Predatory Lending – Can a Homeowner Sue a Bank?

Predatory lending practices that harm the homeowner can often lead to the loss of property, debt and personal injury to the victim’s estate that can leave him or her without any assets because of the predatory lender. This person must understand both what predatory lending is and how and when it is possible to sue the bank.

Determining if the Bank is Predatory

When the bank behind a mortgage or other loan is acting differently than other banks or lenders, it is often because the entity or organization is engaging in predatory lending practices. This can happen in a variety of ways, but the person that has the loan may need to consult with a lawyer to fully determine what legal action is possible and when he or she can start the lawsuit or another remedy. Sometimes, the results of the action sought can provide a way out of the loan, lower interest or principal payments or help seek a lender that does not engage in these predatory practices.

Is the Loan Predatory?

The officers attached to the loan may act in a way that reassures the borrower with promises that could appear too good to be true. Many of these promises involve low-interest rates, decreased fees, loan terms that are too low to be true and other promises that are only a scam to get the person started with the loan. Often, the bank will increase the loan rates, the interest and lock the borrower into long-term loans that can break the bank. The homeowner or other person seeking the loan cannot eventually pay the amount and can end up in debt with astronomical fees and debts owed to the institution for decades.

Legal Financial Scams

Some predatory lenders engage in legal financial scams that can involve mortgages, real estate agents, commercial property and issues with paperwork. The person involved in the scam may have the person sign something without explaining it or providing additional details about the situation. Some lenders will promise one thing, write out the information in the documentation for the deal and not give further details or an explanation of the fine print. In these situations, the lender may increase the interest rate, the rate of payment or the amount due in each payment without telling the person.

Foreclosure and the Predatory Lender

When the bank that issue the mortgage or loan acts in bad faith and engages in predatory lending, the victim will suffer through various issues that can include a foreclosure of the real estate property. The mortgage that has higher interest or payments that are astronomical usually lead to this conclusion because the homeowner is unable to make payments. It is possible to initiate a lawsuit if the victim can prove that he or she did not make a deal with the current provisions or the details in the paperwork are not what was given to the bank such as paystub information and income statements.

Legal and Financial Problems

When a borrower engaged in predatory lending practices suffers injury through legal or financial troubles because of the lender, he or she may have the right to sue the bank because of these activities. Generally, the injury is either economic or non-economic in debt or pain and suffering through the loss of a home because of foreclosure or other issues. The bank involved in these matters could face a lawsuit that is both valid and strong when the borrower has proof of predatory practices in the lending situation.

Evidence is key to any lawsuit, and the borrower may have sufficient evidence with legal support. The borrower can also enact his or her right to rescission which is the ability to turn down a loan even after he or she signs the paperwork. This is usually only a period of three days, but the lender may not explain this or may fail to adhere to disclosing necessary information with these processes. Without the notice, the process with the loan and borrower is not valid or legally binding. The predatory lender may not give information about this or provide details.

Legal Support against a Predatory Lending Bank

When suffering an injury through predatory lending practices, the borrower will need the support of a lawyer to get through the ordeal. Whether the deal is legally binding or is given the rights to sue, the lawyer can explain the matter to the client and pursue the legal remedy necessary to resolve the matter. 

Give us a call at (561)838-9595 for a free consultation. 

Provided by HG.org

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.