Predatory Lending

Predatory Lending comes in different forms and has numerous tentacles. A classic form involves the purchase or refinance of a home. But the incidence of predatory lending can also occur in the context of an auto or other motorized vehicle loan, a student loan, lease of rental premises or any large scale financing where the lender overreaches to a borrower who simply cannot afford the loan. Recent action and media attention to predatory lending in the mortgage industry has hit "sub-prime" lenders hard, and has called much needed attention to this devastating practice. Certain federal and state laws may be used to seek redress of predatory lending practices in its various forms. Our New York City predatory lending lawyers are familiar with these situations.

One classic example of alleged predatory lending was when in March, 2018 was upheld beyond motion in a case against Wells Fargo bank, Classic predatory exists in a bank or other lender signing a consumer up to an unaffordable loan. But even though the evils of the 2009 mortgage crisis and meltdown are allegedly behind us, lender abuse of consumers lives on today in persistent sub-prime lending and high-pressure sales tactics in areas of the country that are most vulnerable to over-extending consumers’ financial obligations.

One other common "red flag" that indicates a predatory loan is an appraisal that is far above the true price for the property. An over-appraisal of a property can lead to the alleged justification for a grossly inflated loan amount and the consummation of a loan that either the consumer simply cannot afford, or one that is a grossly unfair windfall to the lender and/or mortgage broker. Other red-flags include: newly constructed housing developments with home sales for little money down; multiple mortgage refinances with high fees; home repair schemes involving mortgage refinancing; mortgage financing of debt consolidation; high-cost and high fee loans, credit life and/or disability insurance sold with the mortgage; fees paid to an unknown mortgage broker; "stated income" or "no documentation" loans where the loan was not based on a consumer's income or ability to repay; and undisclosed or excessive charges for title insurance.

While predatory lending was prevalent pre-2008, such claims are largely obsolete today. Easy lending standards are essentially gone in the home mortgage arena due to the exposure of bad bank practices before the financial crisis of 2008-2009. The defense of predatory lending in mortgage foreclosure cases is also not currently well received by courts. Though it may have been applicable at the origination of the loan, the current mortgage modification process was to, in theory, remedy the sins of bankers’ past.

Notwithstanding the above, the spectre of predatory lending is fully present in auto loans today. The days of “no credit, bad credit, or prior bankruptcy” are back and auto dealers are overjoyed to finance a car to anyone “with a breath.” Numerous cases come to our New York City predatory lending attorneys in which consumers are locked in to auto loans whose payments are at or close to 100% of their monthly income. This often can be achieved by falsifying a consumer’s credit application to the lender who turns a blind eye to the lies a dealer’s finance manager enters on the application. The result is an inevitable repossession of the car by the lender from a consumer who could not afford the payments from the very beginning. Likewise, the damage to a consumer’s credit report is deep and long-term. No new lender wants to see that consumer had to give up a car for non-payment.

Credit card lenders are no better. The attitude of these can also be “anyone with a pulse” can obtain an account. Luckily, the negotiation of a delinquent credit card debt is often easier under certain circumstances sometimes out, but mainly inside the courthouse.

Please contact us online or call us today at (212) 537-6612 for an initial phone consultation with a predatory lending lawyer in New York City.

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I highly recommend this law firm. Attorneys Unger and Benjamin battled a real estate scammer who defrauded me out of substantial money. They were able to get a good result for me after the defendants put up numerous obstacles and delays over 18 months. And they were honest with me regarding their upfront and contingency fees. Definitely hire this firm if you are a victim of fraud or breach of contract. Rebekah W.
Over the years I have had dealings with many of attorneys and I can honestly say that Mr. Benjamin is the best lawyer I have ever worked with. He's conscientious, and takes care of your case as if his own interests were at stake. He's professional, always answered my calls and takes the time to discuss the best course to take. Everything was done timely and efficiently. I couldn't be happier with the result. I wish they were all like him. The best decision I made was to use him for all my legal needs. Nancy O.
Attorney Benjamin is an excellent attorney. He battled a finance company for me for nine years, defeating multiple motions that were thrown at him over the years. He is an honest, compassionate and trustworthy attorney, and was an aggressive advocate for me for a long time. After so many years, he finally got a great result in August, 2015 after defeating still another motion by the lender. I highly recommend Attorney Benjamin. Daniel O.
We hired this Firm on July 20, 2018 to sue a company for fraud. While the case took longer than we wanted, the lawyers battled for 1 year with this nationwide real estate company to expose the scam they inflicted on us. In order to get to settlement, our lawyer Jeffrey Benjamin cut the Firm's fee in order that we could put more money in our pocket and settle. The lawyers here are honest and bent over backwards to make us happy and settle, and not drag out the case for years. We are so happy we went with this Firm. Thank you. K.J.