Bank Fraud and Abuse

Bank fraud or abuse generally occurs at two different points in the life of a home loan, once at the time when they give you the loan and the second opportunity arrives when they are attempting to foreclose on the home. Proving bank fraud and abuse is useful to a homeowner because it can be used as a defense in court against foreclosure.

Loan Origination Fraud

When a bank is originally giving a homeowner a loan, referred to as origination, there are strict and detailed regulations that the bank must follow to make sure that the homeowner/consumer is not take advantage of. If you’ve never taken out a loan before, then you may have encountered similar terms and regulations when browsing savings accounts via sites such as, or looking to apply for a new credit card. The laws deal with everything from the format and types of documents that must be used, the specific information that the bank must disclose, and the time frame in which these documents and information must be presented.

Attempting to determine which laws were violated when a loan was originated can be a daunting task because loan paperwork is voluminous, the transaction is complex involving numerous parties, and because the laws that regulate the loan process are complicated. The section on Laws that Protect You provides an introduction to the laws and regulations that protect homeowners, but to effectively put these laws to use requires sophistication and experience with dealing with banks. Seeking help from an attorney who is experienced with foreclosures, predatory lending and consumer protections is highly encouraged. There is a chance that the attorney you consult with might encourage a loan audit to uncover lender wrongdoing, so we suggest that you understand what a loan audit is and why they are useful.

Foreclosure Abuse

With the tidal wave of foreclosures hitting the market, banks have become very lax with their procedures for bringing a home to foreclosure and in other instances have just flat out made terrible mistakes. If a mistake has undoubtedly been made, contact an attorney immediately. The fast pace of a foreclosure makes it urgent that you obtain legal help to combat a bank, specially in non-judicial states like California where the foreclosure occurs outside of court. Alternatively, if a homeowner feels that the foreclosure process and in turn they have been abused in some fashion, then contacting the pertinent government regulatory agency to file a complaint should prove useful, though we must warn that this will most likely not prevent a foreclosure, but will rather bring some justice to the situation. In order to save your home, there is really little choice other than getting legal representation in California.

File a Complaint

  1. File a complaint about a national bank
  2. Find out who regulates your bank
  3. California Attorney General
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