Predatory Lending
Even when specific laws have not been violated per se, juries have still demonstrated a willingness to review cases where lenders have acted unfairly and have overreached in their capacities as creditors. The following are examples of questionable mortgage broker and lender behavior and the associated defenses that may be raised.
Examples of Predatory Lending
- Unconscionability may be a defense against loans that have been flipped, made unaffordable and where fees charged have been outrageous.
- Fraud and misrepresentation are also common defenses where evidence of such behavior can be found.
- Brokers who have steered borrowers to predatory lenders could be found in breach of their fiduciary duty.
- Intentional interference with the contractual obligation of a broker with their borrower may be a claim against lenders who give brokers rebates at the expense of a higher cost loan to the borrower.
- After the loan is made, the duty of good faith and fair lending should dictate the lender’s behavior.
