Minnesota Foreclosure Victims Preyed Upon by Predatory Lenders
For homeowners, there is actually one more thing worse than losing your home to foreclosure - knowing that you are in this unfortunate situation because you have fallen victim to predatory lending practices.
A Minnesota couple found themselves homeless after three different mortgage lenders convinced them to refinance again and again until there were no more equity left on their home. This story may seem a bit too familiar but what makes it even more saddening is that the two adults are both suffering from mental disability. This just shows how far unscrupulous lenders and mortgage servicers will go just to serve their personal interest and not those of the consumers.
Nationwide, the foreclosure crisis has resulted to literally millions of homeowners in mortgage default. After much investigation, it was found out that many of the homeowners became victims of mortgage servicers and lenders who engaged in predatory lending practices.
These aggressive lending practices were quite rampant during the last housing boom. There were lenders who falsified information on the borrower’s application, allowing them to get approved for loans they could not afford. On the other hand, there were those that offered hybrid mortgage products along with incentives that include interest only payment, no down payment and adjustable rates.
Unfortunately, these loan products are simply too good to be true. When the interest rates started re-setting on these mortgages, most of the borrowers were surprised with the amount they have to pay in mortgage dues. Some of them had to pay 40 percent more from the original amount. It was not surprising that most could no longer keep up with their mortgage payments and ended up in default.
Because of the lessons learned from these mistakes, most lenders have already tightened lending guidelines in order to make sure that the borrowers are qualified. Even consumers have become smarter and are more careful when applying for housing loans.