General Housing Information Article


Predatory Lending Schemes and Scams

Beware Of Predatory Lending Schemes

Most mortgage lenders are reputable and provide a valuable service by allowing families to own a home without saving the thousands or hundreds of thousands of dollars necessary to buy it outright. However, a few, unscrupulous lenders, especially those who make high risk second mortgages, engage in predatory lending practices that can increase the likelihood that a borrower will lose his or her home to foreclosure. These abusive practices include making a mortgage loan to an individual who does not have the income to repay it, charging excessive interest, points and fees or repeatedly refinancing a loan without providing any real value to the borrower.

Borrowers facing unemployment and/or foreclosure are frequent targets of predatory lenders because they are desperate to find any "solution" to their default.

Homeowners frequently receive refinance offers in the mail telling them that they have been "pre-approved" for credit based on the equity in their home. When you are wondering how you are going to pay your mortgage and other bills, it may appear very attractive to borrow against your house. But consider this, if you cannot make your current payments, increasing your debt, even if you get some temporary cash, will make it harder to keep your home.

Beware of Scams:

  • Equity skimming: a buyer offers to repay the mortgage or sell the property if you sign over the deed and move out.
  • Phony counseling agencies. Some groups calling themselves "counseling agencies" may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself for free, such as negotiating a new payment plan with your lender, or pursuing a pre-foreclosure sale. If you have any doubt about paying for such services, call a HUD-approved housing counseling agency at (800) 569-4287 or TDD (800) 877-8339. Do this before you pay anyone or sign anything. Don't sign any papers you don't fully understand.
  • Make sure you get all "promises" in writing.
  • Beware of any contract of sale of loan assumption where you are not formally released from liability for your mortgage debt.
  • Check with a lawyer or your mortgage company before entering into any deal involving your home.
  • If you're selling the house yourself to avoid foreclosure, check to see if there are any complaints against the prospective buyer. You can contact the Arizona Office of the Attorney General Consumer Fraud Unit for this type of information.
  • Do not sign anything you do not understand. It is your right and duty to ask questions.
  • Information is your best defense against becoming a victim of predatory lending especially for a desperate homeowner! 

Where to Report Suspected Predatory Lending – homeowners can contact the Arizona Office of the Attorney General, or call 1(800) 352-8431 to get information on what steps to take to file a complaint. You may also want to look at Predatory Lending Brochure from the Office of the Attorney General. 

For more information about Predatory Lending go to:

HUD's Predatory Lending Web Site

Attached Document
.pdf Predatory Lending Schemes and Scams


Comments:

QUESTIONS

  • We are on a multi- family well. There are 3 families ... one individual has a pipe leaking. This has been going on for over a week now...we come home from work he has turned off the water... Now the leak is so bad all the water is on his property and none in well reservoir.. My husband and I had to miss work today because there is no water to clean up in... we need this man to fix his pipe... this is unhealthy for the rest of us... now it is costing me money... loss if work and I have to call a plumber because there is air in the lines.. so who do I contact to make this man repair this pipe.
  • I recently bought a home, and moved out of a rental property and they sent us an itemized list of items after we moved and I did a final walk through with them and charging us falsely what can we do to dispute these items?
  • I purchased a condo in October 2019. My inspection identified several repairs needed. I was assured those were the responsibility of the HOA. What was not disclosed is that in November there would be a vote on a Special Assessment, which passed, and now I have a bill for $4800. The seller had been made aware of this for months, but never gave me that information during our negotiations. Do I have any recourse for the seller to be responsible for all or part of this special assessment since it was not disclosed on the statements provided to me?
  • What can I do when my girlfriend that is on the lease with me has people threaten me to move out at such and such time.
  • Hello... I live in an apartment, last week my car was stolen and so were my license plates. The following day, the manager called and had my vehicle towed, I called the office and explained my situation and asked if there was any way they could help me as I am a single mother and live on ssd, they said there is nothing we can do, you are going to have to pay to get your car out, also adding it is in my lease that vehicles cannot be parked with no tags and I should have called them and told them my tags were stolen. Can I force them to pay the fees if I have police report?
  • We got a HELOC and the loan was accelerated on Feb 28, 2011. Loan was sold to another company made the last payment on HELOC on 08/28/2012. We got a letter from new lender saying they charged off the debt on 05/08/2018. The letter also states “please be advised that we cannot bring a legal action to collect this debt or threaten to do so because the statue of limitations has expired. If you do make a payment, we may later be able to bring an action to collect this debt because the payment May start a new statue of limitations”. Has SOL run out, can they collect money if I sell home, 1099?
  • My neighbor is building a porch onto his house, of which his house is already close to the property line, and having the additional balcony he will be close to the fence. He said he'll have someone to come look at it so it is 'up to code' (he is aware it has to be so far away from the property line/fence). Is there any way we can get ahold of the inspection results? Or can we petition to have him stop building the porch? He will be so close to (and a good amount above) the fence, that they will see more of our yard than his own.
  • I signed a lease almost a month ago for an apartment that I have not been able to see. I keep emailing to see when one would be available, and they keep telling me that none are available. I've seen a lot of reviews for this complex noting that there is a huge roach infestation. I'm afraid that they are hiding this from me and that's why I haven't been able to be allowed in to see a model. I'm not scheduled to move for another 3 weeks. Can I back out of my lease?
  • I recently entered in to a lease with myself, my long time girlfriend, and her friend. We used my credit to qualify because neither of them has credit. The friend and I put most of the money down for the deposits and all utilities are in my name. Less than a month after we made the move, my girlfriend terminated our relationship. The two of them expect me to go on living there with them until the end of the lease. I am not ok with that. Is there is any way I can force them to find someone to sign in place of me on the lease and refund my deposit money so I can move out? They refuse to go
  • My landlord has known about the rats in the attic many he never does anything about it the pipes in the bathroom make a big noise after flushing the toilet and I’m wondering what rights I have I’m disabled and feel like he thinks no one can do anything to him

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Documents

.pdf  AzMortgageResource.gov ReadSpeaker

.pdf  AZ Renters Guide ReadSpeaker

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LINKS

Low Income Home Energy Assistance Program (LIHEAP)