Eisrael Gomez Realtor - Monterey County Blog

On Saturday Nov 10, 2007 the Salinas Californian Published an article entitled Housing fraud Alleged by Victor Calderon vcalderon@thecalifornian.com

https://verify1.newsbank.com/cgi-bin/ncom/CLFB/ec_signin

In the article it was noted that a federal lawsuit was filed against an east Salinas housing developer and 10 other businesses and lenders using predatory lending, fraud and unfair business practices.  Article named the following companies: 

• Tuscany at Monte Bella, a housing development
• Valley Community Homes
• Norm Yop Realtors
• Universal Mortgage
• IRA Mortgage
• Creative Mortgage
• Countrywide
• New Century
• Cameron Financial Group
• Wells Fargo Bank

Could this be the tip of the iceberg as Federal investigators sort through the myriad of complaints on their desks?  Based on the number of persons trying to sell their homes, as loans "reset" to higher rates resulting in higher payments, I would venture to say YES! 

How does a consumer protect themselves?  According the California Association of Realtors legal department, be sure the following are clear and included in your loan quote:

1. Rate & any increase in interest rate
2. Term
3. Points (AKA prepaid interest)  (How much are you paying for the loan?)
4. Balloon Payment
5. Negative Amortization
6. Rebates
7. Prepayment penalties
8. Repayment ability (reasonable test- should the bank really be extending credit based on your ability to pay?)
9. Prepaid (Advance) payments. 
10. Home improvement Contractor Payment.  Creditors can't make a payment to a contractor under a home improvement contract from the loan proceeds.  There are some exceptions.
11. Understand your Due on Demand Clause?
12. Refinancing within 1 year?
13. Notice of Assignee of Mortgage.  Lender has to notify you this will happen. 

 The Home Ownership and Equity Protection Act of 1994 (HOEPA) is an early anti-predatory lending federal law that imposes disclosures requirements and other restrictions on certain high cost loans.  It is a precursor to the broader reaching 2002 California Covered Loan Law (CCLL) discussed in the C.A.R. legal article, Predatory Lending: the California Covered Loan Law. 

The above is not meant to replace professional lending or  legal advice.  Please check with a realtor who does not sell loans, an attorney and of course it doesn't hurt to check with a trusted lender.

• Eisrael Gomez
• Full Time Real Estate Agent
• I don't sell loans, but  I do sell homes!
• (831) 809-8266