Lending Fraud

Lending fraud occurs when a mortgage broker or bank use loopholes and dishonest tactics to get people to agree to bad mortgages or home loans, or to buy houses they shouldn’t.  Some examples of lending fraud are:

  • Phony appraisals
  • Inflated appraisal fees
  • Collusion (schemes) between appraisal and lending companies
  • False title and closing costs associated with buying a home
  • Fraudulent or incomplete title reports
  • Inflated home value reports and sales
  • Bait-and-switch mortgage charges
  • Loan modification scams
  • Fraudulent collection activity by your mortgage servicer

Strategic Default: Can I walk away from my mortgage without paying more to the bank?

What is a “Strategic Default?”  Simply put, a Strategic Default is a way for homeowners to walk away from their overwhelming mortgage obligations while avoiding the drastic financial penalties that often accompany such a decision.  With the guidance of an experienced attorney many California homeowners can walk away from the burden of an unaffordable home mortgage loan while incurring little to no obligation to the banks. 

Although California’s anti-deficiency and non-recourse statutes allow many borrowers to avoid the penalties associated with defaulting on a home loan, not everyone is covered under these laws.  Knowing your specific legal rights and obligations is the first and most important step in making a decision regarding your home. 

Our experience working with homeowners since the mortgage housing collapse in 2008 has helped us to find solutions for homeowners in even the most difficult situations.  With the right amount of legal planning and strategic advice, we believe that the majority of homeowners can find the right resolution to what is surely a significant difficulty in their lives.  And because no two situations are identical we offer customized plans and advice for each mortgage case.

Here is just a sample of what we offer as part of our Strategic Default package:

  • Loan Modification counseling: If you decide that staying in your home may be the right choice for yourself and your family;
  • Bankruptcy counseling: If necessary - we work with you on the most practical way to eliminate your debt.
  • Creating a legal plan to avoid potential financial consequences of walking away from your home;
  • Putting a stop to annoying and harassing collection calls from your bank;
  • Putting into place a transition strategy to help you move on to your new home;
  • Helping to get you the most “Cash-for-Keys” from the bank; and
  • Advising you on taking the right steps allowing you to stay in your home for the longest time allowed by law while you make your transition 

What can a lawyer help me get if I have been the victim of lending fraud?

Working with a lawyer after you have been the victim of lending fraud can help you in a number of ways.  Depending on the facts of your case, the lawyer may be able to:

  • Obtain damages (money) for phony appraisals or false title reports
  • Obtain reimbursement for excessive or fraudulent fees
  • Prevent foreclosure on your home resulting from a fraudulent mortgage
  • Work with the lender to restructure your loan or mortgage so it is fair and affordable
  • Obtain damages for malicious and intentional fraudulent lending practices
  • Obtain restitution for money you’ve paid as a result of your lender’s phony “loan modification” scheme
  • Obtain statutory remedies

It is very difficult—if not impossible—for victims of lending fraud to work directly with the lender to find a solution. A lawyer will be able to explain your rights, and will go up against the big financial institutions on your behalf.

It’s obvious I’ve been the victim of lending fraud. Why should I speak with a lawyer?

No matter how obvious the fraud is, it is important to speak with a lawyer about your case for the reasons listed here.

It is also important to speak with a lawyer as soon as you discover you have been the victim of lending fraud because your case has to be filed before the statute of limitations expires.  No matter how strong your case is, it has to be filed before the time limit expires or you will lose your ability to recover any compensation.

I’ve been offered a three-month loan modification trial by my lender but I still haven’t received a final answer

Unfortunately, this is a very common issue with homeowners in California.  Although lenders promise to work with borrowers to help them obtain a loan modification, the sad reality is that thousands of homeowners are given the runaround and are left in limbo for months and years on end.  All the real statistics show that both the banks’ in-house modification programs and the government’s Home Affordable Modification Program (“HAMP”) have been hopelessly ineffectual in helping keep people in their homes. 

Very few people actually receive loan modifications from their lender by themselves.  The more common scenario is an endless loop of lost paperwork and constant requests by the banks for the same information that was provided to them dozens of times before.

Another common scheme by the banks is to offer borrowers a three month “trial program” to see if they “qualify” for a loan modification.  Sometimes borrowers keep paying under the “tree month” program for more than a year before they’re given some kind of answer.  Sometimes they get rejected outright.  Some borrowers are even foreclosed on by the bank while they are still paying under this “trial plan.”  Few homeowners are actually offered loan modifications. 

If you feel that you have fallen prey to one of these loan modification scams, you should speak with an experienced attorney as soon as possible.  If you believe that you have been offered one of these programs by your bank as a way to collect some extra money from you before they proceed with foreclosure, then you need to know your rights.  Here at the Pivtorak Law Firm, we have been representing victims of the mortgage collapse since 2008.  We work, one-on-one with homeowners to address their housing concerns and have prosecuted many cases on behalf of victims who have been treated unfairly by their lenders. 

I am upside-down on my mortgage but I don’t think I have a case against my lender, do I still have options?

Yes, as a homeowner in California you are provided with many protections under the law. Unfortunately, and not surprisingly, most people are not educated by their lenders on California’s Anti-Deficiency and Non-Recourse statutes.  These laws generally mean that if a lender forecloses on your house, they cannot sue you for the difference between what you owe and what they sell the house for.  However, because Anti-Deficiency laws apply differently for various situations and since there are exceptions to the general rule, it is crucial to speak with an attorney experienced in these matters.  It is also important to speak with a tax expert regarding any potential income-tax liability resulting from this process.   

In some rare instances, a personal bankruptcy may also be an option depending on your unique circumstances. Although the idea seems intimidating, this is a fairly routine process, especially for those who have accumulated a lot of personal debt because of their housing situation. For more information, please visit our sister website, dedicated to educating consumers on the personal bankruptcy process:  www.chapter7counsel.com