Could you have an illegal mortgage and not know it?

From the Sun-Sentinel


> Posted by Daniel Vasquez on September 16, 2009 10:50 AM in the Sun-Sentinel

Apparently a majority of Florida attorneys say homeowners are not typically the first to realize they have a mortgage with terms that violate their consumer rights, such as hidden fees or balloon payments they were not told about at signing.

The culprits: Predatory lenders who took advantage of consumers willing to sign anything to get their dream home.

If you've been through the loan process, you realize how confusing the forms and laws can be. Many consumers found out the hard way that they were tricked into signing a bad mortgage, and many will find out soon, according to the Consumer Mortgage Audit Center, which analyzes loan data and problems.

The Center hosted a recent webcast poll in which nearly 64 percent of Florida lawyers who responded said that most homeowners with problematic mortgages are clueless about it. Also, most respondents warned that more mortgage violations and predatory lending will be "detected" in the coming 12 months as opposed to the past 12 months.

Best practices that the Consumer Mortgage Audit Center recommends to homeowners nearing or in foreclosure are:

Compare your HUD-1 document, which buyers get at settlement to outline most costs, with the same lender’s good faith estimate. If the figures on your HUD-1 and your good faith estimate look different, it may be time to call an attorney.

If you suspect there are violations in your mortgage paperwork but can’t be sure, take the time to consult an attorney. Your legal team will appreciate your efforts to be proactive, rather than reactive.

Look for an attorney in your area who handles foreclosure defense cases, as they’re typically most familiar with national homeowner’s rights, as well as laws designed to protect borrowers in your state. Most foreclosure attorneys do not charge for an initial consultation; further, if an attorney wins the foreclosure case against a lender, the lender is responsible for paying the homeowner’s attorney fees.

About the poll: The Consumer Mortgage Audit Center sponsored a Continuing Legal Education webinar for attorneys on July 31, 2009. Of the attorneys in attendance, 47 who practice in Florida shared their opinions, which were used in the above release. Responding attorneys specialize in foreclosure defense (42.6 percent), general practice (17 percent) and real estate (17 percent).