Consumers are entitled to a host of federal and state protections as it relates to credit, mortgage loans and servicing, billing and debt collection. Consumer protection laws hold companies accountable when they seek to rake in profits by taking advantage of a buyer’s lack of bargaining power or access to information.
The Miami consumer protection lawyers at Jacobs Keeley are able to utilize these laws to fight back against abusive business practices, which are most often perpetuated against consumers in financial distress, when they are at their most vulnerable.
Some of the consumer protection laws that can work in your favor include:
- Truth-in-Lending Act
- Home Ownership Equal Protection Act
- Regulation X (Real Estate Settlement Procedures Act)
- Fair Debt Collection Practices Act
- Telephone Consumer Protection Act
- Florida Statute Title XXXIII Chapter 501 Consumer Protection
Predatory lending practices, which form the basis of many consumer protection lawsuits, cover a broad range of conduct, from charging exorbitant interest rates to hidden fees and penalties to application of payments to the low-interest portions of balances first.
Predatory mortgage lending in particular takes a severe toll. It drains families of wealth, destroys the benefits of home ownership and frequently leads to foreclosure action. In fact, it’s estimated Americans shell out more than $9 billion annually as a result of predatory practices.
Some types of predatory mortgage lending include:
- Excessive fees. These are fees and points not directly reflective of the mortgage loan’s interest rate. Lenders often get away with this because the costs are easily disguised when financed. Where a competitive loan might result in fees of less than 1 percent, predatory loans are accompanied by fees that top 5 percent.
- Steering. This is when a borrower is pushed into a subprime mortgage, even though he may qualify for a regular loan. Fannie Mae reported recently that as many as 50 percent of subprime mortgages could have qualified for loans with better terms. Worse, more than half of refinance mortgages in historically African American communities are subprime, compared to 9 percent in predominately white neighborhoods.
- Abusive pre-payment penalties. Borrowers who were roped into subprime loans are often eager to refinance as soon as their credit scores inch upward. However, 8 out of 10 subprime loans tack on a fee for paying a loan off early. Sometimes, these penalties can be in effect up to three years, and can cost the buyer up to six months’-worth of interest.
- Loan flipping. This is when a lender refinances a property in order to collect a fee, even though the process yields no tangible benefit to the borrower. This can cost borrowers thousands of dollars, and can result in increased monthly payments and diminished home equity.
The Truth in Lending Act (TILA) and Home Ownership Equal Protection Act (HOEPA) aim were drafted to curb such abuses.Consumer Rights in Foreclosure
The foreclosure crisis exposed numerous unfair and illegal practices in the real estate industry – particularly among lenders and mortgage servicers.
Historically, those facing foreclosure could expect a run-around from mortgage servicers. Documents went missing, foreclosures churned forward despite loan modification efforts, important deadlines were missed and buyers couldn’t get anyone on the phone who could provide clear answers about what they owed or how to keep their homes.
Consumer protection laws effective January 2014 under Regulation X prohibit such activity, and provide clear guidelines for servicing standards.
Among these protections:
- Lenders must carefully assess a borrower’s ability to repay a loan. The new Qualified Mortgage standard will allow buyers to avoid risky features, such as interest-only payments.
- Servicers must issue a clear monthly statement so borrowers can see how payments are credited.
- Mortgage payments have to be credited the day they are received.
- Borrowers with adjustable rate mortgages must be given fair notice of an impending interest rate change.
- Servicers can no longer “dual-track” mortgages by moving forward with a foreclosure while also working through a loan modification;
- Homeowners are entitled to timely, accurate information about the status of their foreclosure;
- Servicers need to offer a continuous point of contact for borrowers fighting foreclosure, and those individuals must be able to access critical documents and answer important questions.
Other consumer protections shield those who have fallen behind on other bills such as credit card payments and outstanding medical balances.
Often, these people are targets of incessant calls from debt collection agencies. Litigation is a constant threat, even when the underlying debts are old or haven’t been sufficiently verified. Other scams involve “phantom” debt collectors, who knowingly attempt to collect debts consumers don’t owe or the agencies don’t have a right to pursue.
Under the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act, consumers can fight back against agencies that violate codes or acceptable conduct.
Our experienced consumer rights attorneys recognize these kinds of deceptive and illegal business practices don’t just harm consumers. They distort the market by allowing dishonest companies to gain an unfair advantage over competitors who act ethically.
We are prepared not only to defend your rights, but also explore the launch of an offensive attack to call out companies that violate these important consumer protections.
If you're battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley Trial Lawyers for a confidential appointment to discuss your rights.
Call us at (305) 358-7991.