Predatory Lending: Can You Get Your Money Back?
The unethical practices of predatory lenders have caused financial injuries to many consumers. These predatory lenders offer loans with unfair terms while taking advantage of the borrower’s inadequate understanding of the terms and conditions of the loans.
If you are a victim of predatory loan practices and you are wondering if you could get your money back, we’re here to help. Our experienced consumer credit protection attorneys at Stecklein & Rapp can provide comprehensive answers to all your questions about predatory lending practices and how to recover lost finances. We proudly serve clients throughout Kansas City, Missouri, Kansas City, Kansas, and Lincoln, Nebraska.
What is Predatory Lending?
Predatory lending can be described as the unethical practices of lenders, real estate brokers, and mortgage brokers who use unfair, exploitative, or misleading tactics to convince a borrower to take a loan that they don’t need or can’t afford. Some predatory lending practices include:
- Inadequate or false disclosure
- Misrepresenting the true cost, and other terms and conditions of the loan
- Risk-based pricing
- Inflated fees and charges
- Asset-based lending
- Reverse redlining
- Loan packing and loan flipping
For instance, the predatory lender may decide to insert credit insurance on personal loans or auto loans. Other examples include adding high service fees and charges on mortgage loans, balloon loans, and charging excessive points and fees.
Fortunately, there are federal and state laws that protect borrowers against the unethical practices of predatory lenders. These include:
Truth in Lending Act (TILA)
The Truth in Lending Act protects consumers against unfair and inaccurate credit billing and corrupt credit card practices. The law requires lenders to provide borrowers with comprehensive information about loan costs. With this, you can shop for loans from different lenders and make a comparison.
The Credit Card Accountability Responsibility and Disclosure Act
The Credit CARD Act of 2009 was designed to protect credit card holders from abusive lending practices by card companies and issuers, thus, protecting users against an increase in fees and interest rates, and overly short notifications about changes.
Equal Credit Opportunity Act (ECOA)
The Equal Credit Opportunity Act of 1974 was created to prohibit credit discrimination on the basis of sex, marital status, race, color, religion, national origin, age, or because a consumer receives income from a public assistance program. If credit is denied, the law requires that a lender provide a reason for the denial.
Home Ownership and Equity Protection Act (HOEPA)
The Home Ownership and Equity Protection Act of 1994 was created to discourage banks and other financial institutions from predatory lending when funding home equity and mortgage loans. The law requires lenders to provide consumers with certain disclosures to help them better understand the costs of the loan.
Also, there are state laws that address predatory lending, usually by restricting the terms or provisions of certain high-cost loans. The Kansas Consumer Protection Act (KCPA) was enacted to help protect Kansas consumers from fraudulent, unethical, or deceptive business practices. Through the Act, consumers are able to file a legal suit against predatory lenders or corporations.
Getting Your Money Back
On Monday, May 1, 2017, the Supreme Court ruled in favor of the City of Miami, allowing them to file a lawsuit against two banks, Bank of America and Wells Fargo, for discriminatory mortgage lending practices that violated the Fair Housing Act of 1968. If you are a victim of predatory lending practices, some steps to get your money back include:
- Filing a complaint with the Consumer Financial Protection Bureau. You can visit the website to file a complaint or submit your complaint by phone.
- Activate your right of rescission. This right allows borrowers to cancel home equity loans, mortgage loans, or line of credit with a lender within three days of closing.
- Sue the lender. Just like the Bank of America v. City of Miami case referenced above, you are within your rights to sue the lender for unethical or predatory loan practices.
How Legal Counsel Can Help
Being a victim of predatory lending practices can be terrifying. Nonetheless, you don’t have to face it alone. You need to retain a knowledgeable consumer protection attorney immediately to protect your rights.
Our attorneys at Stecklein & Rapp have dedicated their career to handling consumer credit and credit report matters. We will assess your case, gather necessary evidence, and compose a strategy to assist in recovering your financial losses. We will fight vigorously on your side to help you recover your money.
Consumer Credit Protection Attorneys in Kansas City, MO
Predatory lending practices can turn your dream to own a home into a nightmare with exorbitant fees and foreclosure threats. If you have been financially injured from predatory loans, call Stecklein & Rapp today to speak with a knowledgeable consumer credit protection attorney.
With locations in Kansas City, Kansas, Kansas City, Missouri, as well as Lincoln, Nebraska, our experienced team of attorneys have the knowledge and insight to fight on your side and pursue the justice you deserve. Call us today to schedule a free consultation.