I see a lot of people with predatory lending cases concerning real estate. I take an incredibly small percentage of those cases. This is not because I have no pity for the consumers who are my potential clients, it is because given the facts of their situations, there is little help I can give. And the tragedy of it all is that the reasons I cannot help are similar in many cases.
Mortgage brokers are not in business to help consumers. They are in business to make money. Most consumers are hardly sophisticated enough to look after their own best interests, and there is little an attorney can do after the deal falls apart and foreclosure looms.
If you are looking to purchase a home, refinance, or engage in some other real estate transaction this year, hire an attorney. A mortgage broker will take a fee of thousands of dollars. An attorney in most simple real estate transactions will probably cost $500-$1,000, and their job is to represent your best interests, nothing more. They have no stake in the transaction, and can save you thousands more than their fee.
Low interest rates, the proliferation of sub-prime lending, and the booming housing market have resulted in unprecedented levels of home purchases across the country. Unfortunately, it seems like few of those who purchased homes are able to keep them, if the booming foreclosure rates are any indication.
Along with legitimate (albeit oppressive) sub-prime loans, I see a lot of paperwork from brokers willing to “fudge the numbers” to get even more people into houses and generate even more fees for themselves. Nearly every client I saw in 2006 with a potential predatory lending case had drastically increased income on their loan application.
The problem? The homeowner signed that paperwork, affirming the accuracy of their income statement, among other things. Many others swore that their closing went very different from what the HUD-1 Settlement Statement shows. But they have no proof on which I can build a case. Others did have some evidence that checks that should have been written to them went instead to an “investment” they didn’t realize they were making, and on which they lost the money. The list goes on.
In many of those cases, there is little I can do to fix the problem on the back end without charging by the hour, because the best I can hope for is to untangle the mess. But hiring a real estate attorney on the front end could have prevented the situation entirely.
If you are going to buy or sell real estate in 2007 (or any time), hire an attorney. Find one through your local bar association or phone book.
To find a consumer or bankruptcy lawyer, use the Caveat Emptor Consumer & Bankruptcy Lawyer Directory.
