There are actions being taken in Congress right now to lessen the strength of agencies designed to keep consumers safe from unfair practices, such as the Consumer Financial Protection Bureau (CFPB). Some politicians criticize these agencies, claiming that they are harming businesses that are just trying to operate as they have been. In a country ravaged by unfair lending practices and student debt, consumers need to be very careful when engaging in transactions with these companies. Another target is the Dodd-Frank wall street reform passed in 2010, following the great recession. This rule strengthened regulation on financial industries and lending practices. Unfair lending tactics can be illegal, and learning what they are can help you find out if you are being victimized.
Watch Out for These Unfair Lending Practices
- Loan flipping: This practice occurs when borrowers are convinced to refinance their mortgage with the promise of more money coming back their way through a lower annual percentage rate. The problem is, lenders hide away extra fees, often making it more expensive for the borrower in the long run. Lenders may also include balloon payments due at the end of a loan and hidden fees.
- Failure to disclose information: Under the Truth in Lending Act (TILA), mortgage companies have to disclose the cost of the mortgage including the total amount owed, annual percentage rate, the total amount of payments, and the payment schedule. Letting the borrower clearly know the amount owed, any changes in price, and the true risk of the debt is the responsibility of the lending company.
Actions in Congress are lessening regulations on financial entities which could mean that predatory lending practices may be easier for them to get away with. Even if you are aware of these practices, lenders may slip something past you that could have devastating effects on your finances. New Jersey bankruptcy attorneys at Garland & Mason, L.L.C. are dedicated to finding out if your loan provider is following the law.