Truth in Lending

Creditors (lenders) are required, by law, to disclose the structure of loans extended to borrowers, including those people entering into fixed- and variable-rate mortgages.

To wit:
Law, Regulations, Related Acts
Consumer Protection

§ 226.17 General disclosure requirements.

(a) Form of disclosures. (1) The creditor shall make the disclosures required by this subpart clearly and conspicuously in writing, in a form that the consumer may keep. The disclosures shall be grouped together, shall be segregated from everything else, and shall not contain any information not directly related 37 to the disclosures required under § 226.18. 38 The itemization of the amount financed under § 226.18(c)(1) must be separate from the other disclosures under that section.

§ 226.18 Content of disclosures.

For each transaction, the creditor shall disclose the following information as applicable:
(b) Amount financed. The "amount financed," using that term, and a brief description such as "the amount of credit provided to you or on your behalf." The amount financed is calculated by: (This is how much you're borrowing)

(d) Finance charge. The finance charge, using that term, and a brief description such as "the dollar amount the credit will cost you." (This is how much it's going to cost you to borrow the money in the paragraph above)

(f) Variable rate.
(2) If the annual percentage rate may increase after consummation in a transaction secured by the consumer's principal dwelling with a term greater than one year, the following disclosures.
(i) The fact that the transaction contains a variable-rate feature.
(ii) A statement that variable-rate disclosures have been provided earlier.

(g) Payment schedule. The number, amounts, and timing of payments scheduled to repay the obligation.
(2) In a transaction in which a series of payments varies because a finance charge is applied to the unpaid principal balance, the creditor may comply with this paragraph by disclosing the following information:
(i) The dollar amounts of the largest and smallest payments in the series. (This is how much the person will be paying each month (or whatever the payment terms are, which are similarly required to be disclosed)

(j) Total sale price. In a credit sale, the "total sale price," using that term, and a descriptive explanation (including the amount of any downpayment) such as "the total price of your purchase on credit, including your downpayment of $ ." The total sale price is the sum of the cash price, the items described in paragraph (b)(2), and the finance charge disclosed under paragraph (d) of this section.

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Like I said in another thread, this isn't freaking rocket science.

- If you cannot afford the cost of the capital loaned to you, then don't enter into the loan agreement!

- If you don't understand the operative terms of loan agreements, then bring somebody who does.

- If you feel the lender is engaging in predatory lending practices, then go to another one. Do some research before sitting with any lender.

- While it must really suck to lose the roof over your head because of poor decisions you made, the consequences of failing to meet the operative terms of a loan agreement were made available (and attested to) PRIOR to any loan being closed.

12 CFR 226

15 USC 1601 et seq

Homebuyer beware, FBI reports, for years, have been telling us that the fastest-growing white-collar crime in the United States is Real Estate and Mortgage Fraud.

:kick:

I have been seeing an ad for payday advances lately, and the main point of the ad is to say that we comply with all federal and state regulations on disclosure and truth in lending.

:wtf: So they didn't before the current credit crisis? Now they will tell you exactly how bad they will rake you over the coals before they lend you the money? It is really sad that they even have to say this in an ad at all. I don't think this makes them the "good" guys.

$200 for consulting an attorney shouldn't be such a huge thing.


Just sayin' ...

Equity skimming plagues region

The deceptions of Financial One LLC, a Delaware company, began with its name and didn't end until at least 39 people had lost their homes.

Financial One wasn't in Delaware -- it was incorporated in Michigan. Those who walked through its doors in an office building in Lathrup Village looking for home improvement loans sometimes ended up homeless, with their equity stripped and their houses in foreclosure, according to state documents detailing the mortgage scheme.

The state issued a rare summary suspension of Financial One's license in February, citing "an imminent threat to the public welfare." Financial One's president, Johnnie Denham Jr., could not be located for comment this month by The Detroit News.

The alleged scheme, called equity skimming, is one of several that have plagued Metro Detroit in recent years, costing homeowners millions of dollars and contributing to the region's record number of foreclosures.

An affidavit filed by state mortgage examiner Elliott Purty in support of the suspension of Financial One's license lists 39 homes -- 37 in Detroit -- where Financial One stripped $968,775 in equity out of the properties.

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Predatory lending practices have been reported since the 90s. If the industry was self-regulating it would have clean up its act long ago.

Without any effort, a simply google of mortgage fraud produces hundreds of examples where the "consumer" was a banker or a person in real estate.

There's no doubt or dispute that there are roaming bandits in every financial sector of this country stripping assets from individuals, counties, cities, and states.

Recent stories surfaced where nursing home assets are stripped "legally" leaving residents paying for services they never received.

Capone nor Sopranos could not boast about the ongoing mass robbery in this country operating under the guise of "business".

In this climate, any effort to place responsibility solely on homeowners while entire cities, counties and states are financially going under at the hand of the SAME robber baron actions is a feeble attempt to willfully ignore the obvious.