Though it’s a shame to say so, not all lenders are honest. While we might hope that those we deal with in business or with private loans are upright and eager to follow the rules, that isn’t always the case. That lack of honesty can mean a lot of bad things can happen to your finances if you aren’t careful. Even worse, you could lose not just some money or your credit score, you could lose your home.
It’s important to be aware of the ways lenders can take advantage of homeowners. With the help of the Gagnon, Peacock and Vereeke site, here is a list of potentially illegal practices a lender may try to pull on you.
- A failure to provide proper notice
Keep track of every notice you receive, because if there has not been enough given, you may be entitled to sue and keep your home. It’s required that banks give notice of missed payments and notify you when your home may be foreclosed upon. If they failed to do that, you have a case.
- Lender bad faith
Did your lender refuse to let you pay? No matter the reasoning behind this, if you made a good faith effort to make a payment and your mortgage company refused to take it, you once again have a case that any foreclosure is not due to your own fault. Missed payments would be on the bank.
- Overcharging for late payments
It’s a common practice for late payments to come with a fee. However, if your bank was overcharging for these late payments, and that led to a greater increase in your debt which resulted in a foreclosure, you shouldn’t be held responsible for it. This shameful activity should be stopped immediately. It’s another good reason to hold on to any statements you receive and to watch your bank balance to make sure there are no extra fees being taken out.
- Predatory Lending
This term became national news during the Great Recession, but unfortunately, such practices continue today. Predatory lending means a bank offers extremely unfair terms for a loan and it doesn’t explain those terms upfront. If you signed up for a loan and only found out later that the interest rates were far higher, the fees much greater, and those facts made the loan impossible to pay back, then you should be looking at contacting a lawyer.
While I wouldn’t wish any of these things to happen to anyone, it’s important to be aware of the practices upfront so you can better protect yourself. Forewarned is forearmed, as they say, and knowing that any of these are possible will give you the chance to keep an eye on your bank.
Always remember, a bank is a business, and businesses want to make money. While many bankers are upstanding people, none of them are your friends, and some of them are as unethical as people in any other profession. Keep your eyes open and don’t take anything at face value.