Victim of Subprime Lending?
Legal Help from Our Philadelphia Foreclosure Defense Lawyer
In the 1990's the amount of subprime loans rose sharply. Predatory
lending tactics by subprime lenders often target minorities calling it
reverse redlining. Not only were minorities harmed, others have fallen
prey to the subprime lending through aggressive broker tactics and mass
marketing campaigns.
The Law Office of Michael P. Forbes, PC is knowledgeable in all aspects
of subprime lending, predatory lending and collector abuse. I have helped
clients by successfully defending against
foreclosure proceedings. I represent the best interests of my clients and protect their rights
against fraudulent and deceitful lending and collection activities.
What is subprime lending?
Loans are either prime or subprime and the term usually refers to the borrower
although there are lenders who focus on subprime lending. Supporters of
subprime lending claim it allows borrowers with poor credit history and
limited assets a chance to obtain a loan previously denied because of
the inability to meet the prime lending standards.
Following are some of the loans made to borrowers who cannot qualify for
a traditional prime loan:
- Non-conforming loans
- Subprime lending
- Near prime lending
- Non-prime lending
- Second-chance lending
Subprime borrowers are limited in their ability to obtain favorable loans due to:
- Size of possible down payment
- History/number of delinquencies
- Type of delinquencies
- Excessive debt
- Lack of assets or security
- Legal orders to pay judgments
- Bankruptcy
Subprime loans have higher interest rates with less favorable terms to
compensate the lender against the risk in case the borrower defaults on
the loan. The subprime loan is at a higher cost than a prime loan and
has less favorable conditions.
What Happens to the Interest Rate?
Many subprime or non-conforming loans start out with low interest rates
for the first year. After the first year, the interest rates rise and
that increases the monthly loan payment. Borrowers would refinance into
a new subprime loan with additional points and higher interest tacked
on. Borrowers who took out adjustable-rate mortgages (ARMs) which gave
them lower interest rates in the beginning of the loan ended up defaulting
when the interest rates increased after the designated time period.
Subprime Lending Market
Brokers are very aggressive in the subprime lending market. Some state
the value of a property above its actual value, overstate borrower's
income, increase the interest rate in the loan or relay false credit score
information to lenders. The purpose is to get the loan for the borrower
and receive a sizeable commission.
If you were the victim of aggressive broker tactics that were fraudulent
or deceitful when you obtained a subprime loan, you may have a possible
recourse against the broker and lender. You should involve your attorney
in your legal matter. My Philadelphia foreclosure defense office can review
your loan paperwork and advise you on your possible case.
What Are My Consumer Rights?
Lenders in the subprime market often approve loans easily or they fail
to fully explain the actual cost of the loan to the borrower. They also
encourage frequent financing to get better interest rates and roll the
costs to the new loan making it harder for the borrower to repay. The
lender benefits each time a loan is refinanced and it costs the borrower
dearly. The predatory subprime lending traps uneducated or targeted borrowers
into a cycle of debt. In the meantime, the lenders realize large profits
from each loan origination.
If you face foreclosure due to illegal activity on the part of a subprime
lender or broker or you suspect wrongdoings, you should seek legal help
from a Philadelphia foreclosure defense attorney experienced in debt collector
activities.
The Law Office of Michael P. Forbes, PC protects the rights of victims
of subprime lending in Pennsylvania.
Call today!