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

  • i live in an senior apt complex. My neighbor died next door to me it was the end of the month the apt manager when the kids came to move the furniture out was given paperwork stating they now owed next month rent and charges which totaled 1200 the rent was 565.00. The manager presented it in a hostile manner. The kids didnt have the money to bury their parent let alone pay this bill and the reason for the bill in the first place? Because a proper 30 day notice wasnt given. How the hell are you suppose to give a notice when you have dropped dead literally. Is that legal?
  • we are getting conflicting answers we need to know specifically : Is the ladlord responsible for paying trash service? we know they have to provide cans
  • Just moved out to AZ, my girlfriend and I have a house with a pool and a walled in back yard. She asked if it is legal to sunbathe without a swimsuit or any clothes on. I know there are public exposure laws, but does it make a difference that is in my own property and with an enclosed yard? Or if a neighbor looks over my wall and sees her and reports it, are we in the wrong?
  • 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 listed my granddaughter as 18 month old. No fence or gate was around the pool from back doors of home, as required by permit under AZ Law. The lessor had a real estate agent as did we. The lease was broken, accepted by the lessor. The lessor does not want to refund $3,900.00 security deposit. The exterior fence from driveway also was not self closing either and we have pictures of both. Did the lessor break the AZ law by entering into a legal contract and not have a Permitted, Inspected fence and self closing gate around the pool, Knowing an 18 month old be occupying the leased home?
  • My house foreclosed and was sold at auction on 4/4. On 4/5 I spoke with the new owner and he said he would give me until 4/12 to vacate. Today 4/9 I recieved a Forcible Detainer request form in the mail. DO I need to be out by today?
  • I have a balloon note I didn't know I had one.now they want $163.000 buy the end of this month my morgager didt tell me and I didn't read the contract because I trusted him now I don't know what to do????????
  • I rented a housefrom aperson that was not the real owner.He pretended. I paid for security deposit and 1st months rent. Well yesterday a man came over and asked me what i was doing in his house. So i explained to him what happened. So now i have 3 days to get out with my family. Can he do that even if i recieve mail there electricity is in my name. What can i do. I got scammed 1700
  • i have a 2 bedroom 2 bath apartment i live here with my 3 children (14,14,4) a friend of my just lost her home and is temporarily staying with us its her and her significant other... My ex keeps sending messages about too many in my home so my QUESTION is : is 3 adults and 3 kids illegal??
  • I signed a contract to move into an apartment 6 weeks ago paid all fees and first months rent, I am supposed to move in on June 22, 2019. I received a phone call today telling me the apartment will no be available because the current renter has decided not to move. I have less than two weeks to find alternative housing is this legal?

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