What is an ITIN?

An ITIN is assigned by the Internal Revenue Service (IRS) to individuals who are not eligible for a Social Security Number (SSN) but have earned taxable income. You can apply for an ITIN when filing taxes or when opening a savings account in the United States. ITINs are nine digit numbers, similar to the SSN, that begin with the number 9 and are generated to be used as identification for tax purposes.

Aside from tax payments, an ITIN can also be used to access financial services. Some banks may take the ITIN as part of your identification when you apply for a bank loan or credit card. However, there are limitations to the use of an ITIN from a legal standpoint. The ITIN cannot replace a Social Security Number (SSN), especially when it comes to working rights. The placement of on ITIN on work documents constitutes fraud.

Using an ITIN to Build Credit

Many financial institutions will accept an ITIN as a form of identification to apply for loans and credit cards. By using your ITIN number to apply for loans or credit cards you can begin to establish a credit history in the United States.To make sure that your records get reported correctly with credit reporting agencies, it is important to understand how the agencies operate. The three largest credit bureaus, TransUnion, Experian, and Equifax, compile a person’s credit history by obtaining information from their creditors such as credit card companies and financial institutions.

They use personal information, such as an SSN, birth date, address, and full name to compile a credit report for each individual. An SSN is a unique number and helps the agencies recognize and verify identity when receiving personal credit report information from

creditors.

When the bureaus receive credit information about an individual with an ITIN number it is possible that they will utilize a combination of their name and address to verify their identity. Therefore, if you are building a credit history with an ITIN number, be sure to always use the same spelling and your full name each time you apply for credit. For example, if Carlos Diaz opens a credit card with Chase and then opens a credit card with Citibank as Carlos Ramon Dias, there may be confusion. The credit agencies might create two different

credit reports – one for Carlos Diaz and one for Carlos Ramon Dias. In addition, each time you change your address it is best to update it with each creditor to ensure that information from your creditors is reported correctly.

Tip: Tax season is a great time to apply for your ITIN. Many free tax preparation sites for lower income individuals will help you apply for free.

Sources:

www.irs.gov

www.nedap.org

American Indians, while still falling below many minorities, have several avenues open to them to facilitate acceptance of mortgage applications. The Federal Govt. has established these agencies in response to problems American Indians may face when applying for a traditional mortgage. American Indians can face extraordinary difficulties in obtaining a traditional mortgage due to economic depression in tribal lands and unfair lending practices.

HUD provides Native American’s with recourse to mortgages through the establishment of its Office of Native American Programs, or ONAP. ONAP offers American Indians several options in mortgage types, loan duration, interest rates and amount of down payment. HUD’s ONAP can be accessed through mail, in person or through Web access; in addition, many websites offer a rundown of the benefits of ONAP’s loans providing valuable information to American Indians interested in HUD’s mortgage loans. Some of the benefits from using HUD’s One Stop Mortgage Center are zero down payment, potential refinancing, mobile home financing and veterans programs.

A partnership between the Native American Bank, LenderLive and Greenpoint Mortgage has resulted in turnkey home mortgages for American Indians for a number of purposes like rehabilitation, refinancing and home buying. This partnership provides American Indians with great resources to help in getting a home loan. The Native American Bank is now in position to be the number one lender to American Indians and to reap the rewards of serving this growing sector of the industry.

The Fannie Mae Organization has also created mortgage programs for Native Americans. These do not have as broad a spectrum as the HUD loans and some of the terms may be somewhat less attractive but they are quality mortgage loans offered at good rates. The Fannie Mae organization is a well respected entity in the nation, providing loans and mortgage information to people nationwide.

Freddie Mac also has a specialty division to assist American Indians with attaining a home mortgage.
They provide access to HUD loans and several other programs designed to help Native Americans. This institution provides information to help Native Americans understand the options available to them and the difference between what once was and what the industry has become today.
Home loans to Native Americans consistently fall behind mortgages to whites and several other minorities. The programs listed above were designed with this in mind, to bolster the numbers of American Indian’s successful loan applications. Traditionally, American Indians have been poorly received by many institutions due to tribal autonomy, poor economy in tribal lands and other issues of concern.

One of the factors behind Native Americans’ difficulty in obtaining mortgage loans is the situation on tribal lands. Many times, the economy of these lands is depressed, leading to low paying jobs and high unemployment rates. The American Indians have begun a promising change, however. Jobless rates, though still worse than national levels, are plunging. Social reforms, land acquisition and internal tribal change are revitalizing tribal lands and thus the economy and feasibility of acquiring home loans. Many groups are beginning to recognize the potential of the Native American peoples and are actively courting their interest.

A good small business loan rate is found in the many options available for entrepreneurs. Should a business be minority or women owned then that improves the options available. Commercial lending rates vary but typically not by much when compared to home or private lending. Because commercial loans are reviewed heavily before approval and secured very well, the rates stay close to the prime lending rate.

The Small Business Administration has a number of loan products available to assist small business. Starting with the SBA Microloan which are loans given through SBA intermediaries with lending amounts under $35,000. The small business loan rate is around 8% and is tied to the Treasury lending rate plus 7.5% or 8.5% (depending if the loan is above or under $10,000). The SBA’s primary lending instrument is a loan guarantee product called the SBA 7(a) loan with a maximum guaranteed amount of $1.5 million. Lending is done through an approved bank, the SBA guarantees the loan and the rate is tied to the prime lending rate. 7 (a) loans over $50,000 have a rate maximum of prime plus 2.75% (2.25% if the term is under seven years).

There are community development organizations that lend to small businesses. They exist to create and grow small businesses as small business brings revenue to a community and creates jobs. Their credit standards are not as rigid as formal banking institutions and they are very open to women and minority owned businesses. Typically their small business loan rate is around 4.25%-8.75% interest. Their maximum lending amounts are relatively low being around $50,000-$100,000, but they will have lending arrangements with banks to help with larger loans. These community organizations are distributed throughout the US and serve both urban and rural areas.

Examples of community organization low interest rates include Accion in Albuquerque, New Mexico. Accion offers rates of 2% to 7% depending on risk and has a maximum loan of $150,000. In Tulsa, Oklahoma the Tulsa Economic Development Corporation (TEDC) utilizes SBA products and likes to tout the SBA 504 where they can offer a fixed 4.7% for a ten-year term. The SBA 504 is used for mortgage financing for acquisition and/or renovation of capital assets (land, building, equipment) and it has loan maximum of $4 million. In Harrisburg, Pennsylvania the Harrisburg Regional Chamber has the Capital Region Economic Development Corporation (CREDC). The CREDC has a small business loan below market rate at 4.25% and a maximum amount of $200,000.

These are just a few quick examples of community organizations throughout the country lending to small businesses. As seen sometimes they can beat conventional commercial lending and even the SBA small business loan rate.

The issue of a charity having operations in a foreign country is rather complex, one that involves oversight not only by the Internal Revenue Service, but also by the Department of Homeland Security. It is fraught with pitfalls that can only be avoided if you understand the rules. The Foundation Group has worked with thousands of 501(c)(3) clients with foreign activities…and each situation is different. I can only scratch the surface in this article, but my goal is help you understand some of the challenges associated with foreign country activities.

This subject can best be divided into two primary scenarios: 1) direct activities and 2) charitable giving. Let’s look at each in order:

Direct activities. Direct activities is defined as a domestic (US) tax-exempt organization operating some or all of its programs physically in a foreign country. There are many examples of this: schools, clinics, economic development programs, orphanages, etc.. This can involve US citizens living in and operating the program in the foreign country, a program fully staffed by foreign nationals, or a combination of the two. The biggest challenge in maintaining an IRS-compliant foreign country program is the same as for any 501(c) organization, that is, the program must satisfy a charitable purpose. What is different is the ever-changing landscape of international relations.

One of the key issues here is OFAC – the Office of Foreign Asset Control. As explained at US Treasury website

“The Office of Foreign Assets Control (“OFAC”) of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under US jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.”

In a nutshell, OFAC determines where you can and cannot go and with whom you can and cannot deal with. While technically it is a Treasury Department program, Homeland Security is directly involved. It is imperative that any US charity that intends to put programs in place in a foreign country know what OFAC is saying. It is difficult enough to learn how to acclimate to a unique culture. You certainly do not need the headache of running afoul of Homeland Security.

Charitable giving. This activity usually involves a US charity financially supporting the efforts of a foreign charitable organization. This topic may seem more straight-forward on the surface, but it is actually treated with greater scrutiny by the IRS than are direct activities. For example, a US charity gives money to a poverty relief program based in New Delhi, India. In principle, this is OK, so long as the foreign country or agency is not on any OFAC list (see above). The problem is the lack of direct, fiduciary responsibility for the expenditure of funds by the US organization. In our example, the US charity must ensure that the program being supported qualifies as one that would be recognized as 501(c)(3) if it were in the US. In addition, the US charity must require a detailed accounting of the expenditure of funds in order to monitor compliance with 501(c)(3) related expenditures. Should the domestic organization find out that money is not being spent in a way that would be acceptable by the IRS, the donations to that foreign organization must cease immediately.

Also, the IRS will not allow a domestic charity to be simply a “money conduit” to a foreign organization. US law does not allow such direct-affiliate organizations. In other words, a US charity cannot exist for the sole purpose of financially supporting a specific foreign charity. A US charity must be organized for specific charitable purposes that it alone is responsible for, one of which may be the support of foreign charitable work. It is best when that support is not tied to any specific foreign charity on an exclusive basis. For a new organization it is OK to name the foreign charities to be supported initially, but it would be a big mistake to make the support of those named charities the sole purpose. The IRS would probably deny the application for 501(c)(3) status. Revenue rulings 63-252 and 66-79 deal with some of these issues directly.

If your NPO currently has foreign activities, or plans to in the future, get educated. Your success or failure is at stake.

When it comes to understanding term or whole life insurance policies, there’s good news and not so good news. The good news is that both term life insurance, which covers a set length of time, but gives no benefit once that period expires, and universal or whole life insurance, which is more expensive, but a whole-life policy that leaves a set amount to your beneficiaries, have become cheaper over the past decade. The bad news is that almost all of we mortals are going to need life insurance if we want to protect our loved ones after we die.

These are heavy considerations, but according to research firm LIMRA, the cost of this somber type of insurance has dropped 30 percent since the 1990’s. Studies also indicate that one in three Americans doesn’t have a policy, and of those who do, another third don’t think they own enough.

What that means to the savvy consumer is that now is a terrific time to compare online life insurance quotes and nail down a policy that will yield the biggest return for your investment. Marvin Feldman, president of the nonprofit Life and Health Insurance Foundation for Education (a.k.a. the Life Foundation), notes that “the reason premiums have dropped is life insurance is now based on the new 2001 CSO mortality tables, and those mortality tables show that people are living longer, so that when companies are calculating the cost of insurance, from a mortality standpoint, they can charge a lesser amount.”

But Feldman adds that to find those deals, you have to shop carefully – and doing it online is the best, quickest way. A rule of thumb is “the average person should have 20 times their annual income,” Feldman advises. Those figures are derived from findings in The 911 Report, but essentially, there are two major tests for determining how much you need: One is based on ascertaining what the surviving parties will need in the event of your death-to cover things like mortgage, college, car payments, and cost of living. The other is based on human life value-how much income are you currently earning and how many years can you expect to be earning it.

It’s important, when making those estimates, to get a notepad and write down unexpected expenses that your dependents may be surprised by-things like accounting fees, emergency medical and auto expenses, home repairs, the cost of returning to school, etc. A key insurance information site also recommends consumers not overlook hidden sources of income, which may well disappear with the deceased-for example, 401(k) plans and matching stock option plans, as well as health insurance subsidies.

To drive home just how important it is to provide for your family long after you’re gone, consider that they’ll need an estimated minimum of $15,000 to cover funeral and estate costs.

There are many ways to investment money. If you are planning to get better returns then you should know the ways to invest money at the correct place. You will come across many investors who are not able to get proper returns because they are not aware about the right ways of investment. If you are a beginner for investing then you will get confused amongst the ways of investment. You will have to spend and spare some time to know about the different kinds of investment. It is better to understand the best investment mode that is suitable to you. It is advisable to gain some experience as it will assist you to get higher returns.

If you are beginner in investing then you should think about the money that you want to invest. It is better to decide your financial limitations, before you decide to invest the money. You should have enough funds to invest. If you are ready to start the process of investing then you should take some advice with a person who has experience of investment. This is the best way to select proper modes of investment.

As a beginner investing, you should understand the importance of portfolio. It is true that a portfolio has to be developed for investment. You can invest money in various financial tools. You can risk your money on shares (stock exchange), mutual funds, fixed deposits, flexi bonds, and many more. It is better to choose your area of expertise. You should know that risk your money because your friend is investing. You should be able to judge the best mode of investment that can suit your need. At the same time, you should be able to understand the pros and cons of investment mode, which you have selected. This is the correct way to invest money. It is a known fact that each and every investment mode has some amount of risk. However, if you know the proper ways of investment then you will be able to decrease the level of risk.

If you are a beginner investing then you should be able to plan properly. Planning is the best way to invest money. According to your plans, you will have to create a portfolio that can assist you in setting the financial limitations of your investments. At the same time, it is the best way to execute your plans.

When homeowners are attempting to put together some plan to save their homes, one of the key pieces of information they need to gather is how much they owe the bank in total. Without knowing this figure, it will be impossible to refinance the house, sell for a reasonable price and not owe anything later on, or even put together a short sale with an investor.

The best way for homeowners to get a payoff figure is to request the figure specifically from the lender or its attorneys. That will give them the most updated information on how much is currently needed to satisfy the mortgage in full and stop foreclosure. Payoff statements usually have a “good through” date of up to thirty days on them, and an estimated “per diem” interest charge for every day after the payoff expires.

In addition to requesting a payoff statement from the mortgage company, there are a few other ways for owners to get a rough idea about how much the bank is asking for, but these will not be as accurate. Out of date payoff statements, monthly mortgage balance statements, and public records searches can be useful tools to provide estimates if the lender is not being responsive to requests for updated payoffs.

Out of date payoff figures can give homeowners a very good idea of how much the bank will be looking for in the future to pay off the mortgage, but even a per diem interest charge will leave out other potential future charges. Attorneys fees may increase, or the bank may add a property tax payment of several thousand dollars to the total payoff, which may drastically increase the amount needed to stop foreclosure by paying the loan in full. If the statement is not too far out of date, though, it may be a good estimate of the current due.

Many homeowners still receive a bill every month from their mortgage company that indicates the total amount due on the loan. Usually this is just a balance of the total amount of principal left to pay off and does not include late fees, interest charges on late payments, and the attorney and court costs involved in the foreclosure process. A monthly balance statement should probably never be relied on for any actual payoff numbers, but they are useful resources for bank contact numbers which can be used to get a more accurate payoff, if nothing else.

One final way to get an estimate of the total amount owed on a mortgage is to search the public records in the county in which the property is located. Usually, the history of the mortgages/deeds of trust will be available online (or the owners or any other interested party can just call the county recorder and request the information), which will tell them when the homeowners got each mortgage and how much it was originally for. Again, this will not include changes from the time the mortgage was issued, including the charges listed in the previous paragraph and any payments the homeowners made on the loan.

Searching the title will also give homeowners, real estate agents, mortgage brokers, or potential investors a good idea if there are more liens than just the first mortgage. The bank may be willing to take less on a short sale, for example, but if the owners or investors have to come up with more money to pay property taxes, and more to pay off a second mortgage, and more to pay IRS liens, and more to pay utilities liens, then there is a strong possibility they will not end up with a very good deal that will stop foreclosure. Of course, investors could negotiate down these liens as well, but that’s more time spent dealing with lenders who may not cooperate in the end.

In any event, if the bank is still able to provide payoff statements on a mortgage, that means the homeowners are still living in the house and it has not been sold at the sheriff sale yet. The best bet for anyone interested in helping foreclosure victims or buying foreclosed houses may be simply to ask the current owners to request a payoff from their mortgage company. They can give anyone they like a copy and any parties interested in working with homeowners will have the information they need to make an offer or work on paying off the loan and ending the foreclosure.

An introduction to debits and credits.

If the words “debits” and “credits” sound like a foreign language to you, you are more perceptive than you realize-”debits” and “credits” are words that have been traced back five hundred years to a document describing today’s double entry accounting system. Don’t worry we have you understanding the rules of debits and credits within minutes. Our easy to use, debit and credit chart, will aid your understanding together with practical, debit and credit examples

What is Double-Entry

Under the double entry system every business transaction is recorded in at least two accounts. One account will receive a “debit” entry, meaning the amount will be entered on the left side of that account. Another account will receive a “credit” entry, meaning the amount will be entered on the right side of that account. The initial challenge with double entry is to know which account should be debited and which account should be credited.

Double-entry bookkeeping system ensures the integrity of the financial values recorded in a financial accounting system. It does this by ensuring that each individual transaction is recorded in at least two different nominal ledgers (sections) of the financial accounting system and so implementing a double checking system for every transaction. It does this by first identifying values as either a Debit or a Credit value. A Debit value will always be recorded on the debit side (left hand side) of a nominal ledger account and the credit value will be recorded on the credit side (right hand side) of a nominal ledger account. A nominal ledger has both a Debit (left) side and a Credit (right) side. If the values on the debit side are greater than the value of the the credit side of the nominal ledger then that nominal ledger is said to have a debit balance.

Each transaction must be recorded on the Debit side of one nominal ledger and that same transaction and value is also recorded on the Credit side of another nominal ledger hence the expression Double-Entry (entered in two locations) one debit and one credit. This ensures that when the nominal ledgers (sometimes known as accounts) are placed in a list which has two columns, the left column for listing nominal ledgers with Debit balances and the right column for ledgers with Credit balances, then the total of all the Debit values will equal the total of all the Credit balances. If this does not happen that may mean that one of the transactions was not recorded twice, i.e. once as a debit and once as a credit as required in the double-entry bookkeeping system.

The double entry system uses nominal ledger accounts. From these nominal ledger accounts a Trial balance can be created. The trial balance lists all the nominal ledger account balances sequentially. The list is split into two columns, with debit balances placed in the left hand column and credit balances placed in the right hand column. Another column will contain the name of the nominal ledger account describing what each value is for. The total of the debit column must equal the total of the credit column.

From the Trial balance the Profit and Loss Statement and the Balance Sheet can then be produced. The Profit and Loss statement will contain nominal ledger accounts that are Income or Expense type nominal ledger accounts. The Balance Sheet will contain nominal ledger accounts that are Asset or Liability accounts.

Double-entry bookkeeping is governed by the accounting equation. If revenue equals expenses, the following (basic) equation must be true:

assets = liabilities + equity
In any period of time, revenue might not actually be equal to expenses. If so, the equation can be further expanded, so that the (extended) equation becomes:

assets = liabilities + equity + (revenue – expenses)

or

assets = liabilities + (capital – drawings) + (revenue – expenses)

A = L + C – D + R – E

Finally, the equation may be rearranged algebraically as follows:

A + E + D = L + R + C

This equation must be true, for any time period. If it is, then the accounts are said to be in balance. If the accounts are not in balance, an error has occurred.

For the accounts to remain in balance, a change in one account must be matched with a change in another account. These changes are made by debits and credits to the accounts. Note that the usage of these terms in accounting is not identical to their everyday usage. Whether one uses a debit or credit to increase or decrease an account depends on the normal balance of the account. Assets, Expenses, and Drawings accounts (on the left side of the equation) have a normal balance of debit. Liability, Revenue, and Capital accounts (on the right side of the equation) have a normal balance of credit. On a general ledger, debits are recorded on the left side and credits on the right side for each account. Since the accounts must always balance, for each transaction there will be a debit made to one or several accounts and a credit made to one or several accounts. The sum of all debits made in any transaction must equal the sum of all credits made. After a series of transactions, therefore, the sum of all the accounts with a debit balance will equal the sum of all the accounts with a credit balance.

Debits and credits are then defined as follows:

debit: A debit is recorded on the left hand side of a T account
credit: A credit balance is recorded on the right hand side of a ‘T’ account
Debit accounts = Asset and Expenses (also debit money received into bank accounts)
Credit accounts = Gains (income) and Liabilities (also credit money paid out of bank accounts)

The following accounts have a normal balance of debit:

Assets
Accounts receivable: debts promised by other entities but not yet paid
Drawings by the owners on equity
Expenses

The following accounts have a normal balance of credit:

Liabilities
Accounts payable and taxes payable, notes or loans payable: debts promised to outsiders but not yet paid
Revenue
Capital

Credit and debit items are summarized at the end of a recording period in a trial balance which is a list of all the debit and credit balances. The trial balance acts as a self checking mechanism for the correctness of entries in the individual accounts and also as a starting point for the preparation of the Final Account which is made up of the balance sheet and the trading, profit and loss account.

Examples of debits and credits:

Purchase of a new computer system

Debit Computer account (Fixed asset account) is increased.
Credit Creditors account (Liability account) is increased.

This then results in the following transactions:

Paying supplier for the computer

Debit Creditors account (Liability account) is reduced.
Credit Bank account (Asset account) is reduced.

If you don’t have a credit card or have one that you don’t use very much, you may be asking yourself: “why do I even need a credit card?” Many people are sceptical about the need to have a credit card, even though so many others have more than one. If you are not sure whether credit cards are really necessary, then here is some advice to help you to decide if you need a credit card or not.

Do I need a card?

The first thing you should ask yourself is whether or not you really need a credit card. If you have managed perfectly well for years without a credit card, and your situation hasn’t changed, then perhaps you don’t need a card. If you have money saved then you don’t need a card for emergencies, and there is no need to pay fees and interest if you can live comfortably the way you do now. However, if you find that you are unable to buy large items that you need because you cannot afford to buy them in one go, then you should look at getting a credit card.

Credit history

Although you might not need to spend on a credit card because you are perfectly fine with cash or a debit card, not having a credit card can harm your credit history. If you are a responsible spender then having a credit card will help to build up a credit history. Although you might have never been in debt, this can actually be a problem when you come to get finance such as loans or mortgages. Lenders like to see that you can handle debt such as credit cards. Having a credit card simply for the purposes of improving your credit history is a good idea. If you spend on the card wisely and pay your bills on time then you will have a better chance of getting great deals on loans and mortgages when you need them.

Security

Another reason why having a credit card is important is security. Credit cards are much more secure than cash or debit cards, and you can stop people from taking your money. Also, if someone does use your card you are usually covered and can claim all or part of the costs back. Card security also works the other way, and many retailers or service providers require a credit card for bookings or purchases. Perhaps the best examples of this are hotels, which often require a credit card in order to allow you to book a room or pay for extra services.
Debts

Of course, there are reasons why you don’t need a card. They are extremely tempting to use, and with high credit limits you often feel like you are not really spending money. This can put you deeply into debt and will severely harm your credit rating if you cannot make the repayments. If you are someone who cannot easily control their spending, then you should probably steer clear of credit cards.

Are cards necessary?

Although credit cards can cause debt and other problems, for most people they are a necessity for everyday life, and are required for them to live their life properly. However, this doesn’t mean that getting a credit card is right for everyone. If you are honest with yourself and look at your lifestyle, you will be able to decide whether getting a credit card is right for you. As long as you can make the repayments and you use the card responsibly, then having a credit card is a good idea.

What is a forensic loan audit?

A Forensic Loan Audit is the comprehensive review of all documentation, legal paperwork, transaction data, and other evidence pertaining to a real estate loan that has already been funded in the near, or distant past. A Forensic Loan Audit identifies any illegalities performed by the lender, their broker, or other parties in conjunction with the loan. During the audit process, highly skilled professionals review your loan to ensure that it meets all legal requirements that were in effect at the time the loan was funded.

Why is this important?

Loans must be legal to remain enforceable by the lender. Loan Violations are serious offenses of Federal Consumer Protection Law and lenders may face stiff fines and legal consequences for breaking these laws.

Lenders, banks and investors are firms run by rational business people. Lenders understand the financial ramifications of their mistakes and usually want to avoid expensive litigation or risk being charged with large fines. When their money is on the line, lenders can often be persuaded to mend situations more easily with homeowners.

How does this help a home owner?

Violations are the leverage used to argue your case with lenders. Generally, the more violations, and the more severe those violations are, the better your chances are of obtaining a favorable settlement. This settlement can include punitive damages, attorney fees, new (affordable) loan terms, a delay or prevention of a foreclosure sale and more.

What should a proper loan audit look for?

A thorough loan audit should look for:

Constructive Fraud
Material facts include the terms of the loan, whether there is a prepayment penalty, or any other information which a reasonable borrower would want to know before accepting the loan. Did the broker or loan officer or anyone working for the broker or loan officer fail to disclose any material facts to the borrower?

Fraud and Negligent Misrepresentation
Were any representations, statements, or comments, written or oral made by the loan officer, broker, notary or anyone else which contradicted the terms of the documents? When a mortgage professional makes errors which a reasonably diligent mortgage professional would not have made, he or she may have made a negligent misrepresentation.

Excessive Fees
Were there any Excessive Fees and Improper Charges made by the lender or loan broker? Is there any Deceptive Abusive Predatory Lending Practices, Excessive Prepayment Penalties? What are the Tangible Benefits to the Borrower? Is the loan Affordable to the Borrower? Are the fees disclosed properly?

Breach of Contract
The note and its attachments are a contract. The broker must follow all the terms of the contract such as the way the interest is calculated, and the penalties it assesses. Were there any terms in the contract which the lender failed to follow?

What happens if there are violations in my loan?

Once the loan audit determines that you may have been a Victim of Deceptive Lending Practices or any other type of Mortgage Compliance Issue stated above, you have the leverage to fight your lender.

The best course of action is to hire an attorney who is skilled in consumer advocacy, predatory lending and real estate law.

Your attorney will determine the proper course of action. This may include an attempt to settle the Loan Issue/Documented Dispute with the Lender prior to filing complaint(s) with any agency and inform the Lender of the Issues found in the “Forensic Audit and Loan Review”.

If a loan was funded unlawfully, the borrower may be entitled to compensation, a refund of all interest paid to date, legal fees, or renegotiation of the terms of the loan.

From 2000-2007, tens of thousands of loans were funded unlawfully. Your loan may be unlawful, and you may be entitled to substantial damages whether or not you’re currently in foreclosure. The penalties for failure to comply with the Truth In Lending Act can be substantial.

A creditor who violates the disclosure requirements may be sued for twice the amount of the total finance charge on the loan. In the case of a home mortgage, this can be a very significant amount, amounting in to the scores of thousands of dollars. Costs and attorneys fees may also be awarded to the consumer.

How can this stop a foreclosure?

If you are in foreclosure, the proper litigation can stop the foreclosure process immediately.
The law gives a borrower a limited amount of time to act. If you wait, you may not be able to take action later.

What is Predatory Lending?

Predatory lending is a hot topic in the news and there is a good reason why. Dishonest behavior by many lenders, bankers, brokers and their sales force have caused financial ruin worldwide in the last year or so. As property values fall, energy costs soar, consumers become unable to pay exorbitant mortgage fees. The collapse of the sub-prime market is a direct result of predatory lending.

Here are the various types of predatory lending:

Pay Option Loans
Many lenders and mortgage brokers have acted dishonestly and without integrity by providing teaser rates and “pay option” loans. Bottom line is that many lenders and brokers knew these loans were too good be true, and borrowers were not told the truth. By law, contracted real estate professionals have a fiduciary responsibility to their clients (They must act in the best financial interest of their clients.). When they fail to do so (usually earning significant commissions at great financial cost to their clients), it is called Predatory Lending.

Stated Income Loans
Predatory Lending can also apply to all aspects of the mortgage industry and can also refer to the dishonest practice where a broker or creditor may put a borrower into a loan that the borrower will probably not be able to repay. Federal laws like the Truth In Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”) (as well as many state laws) require that creditors disclose certain terms of loans to borrowers, and when those terms are not disclosed or are inaccurately disclosed, these laws provide severe monetary penalties against these creditors.

Bait & Switch
Predatory lending tactics like the classic bait and switch. You’re sold on the phone by a smooth talking loan officer who pitches you a great rate. Things move quickly and when you appear to sign your loan documents with a notary at the closing table, the loan costs have increased significantly and/or that great rate isn’t so great anymore. You wonder, “what happened” but it s too late. You are already at the closing table and you face significant penalties for delays in the transaction by the seller, or you already are committed to a refinance because you need the cash out.

Elder Abuse
Elder abuse is really common because retirees often have a large amount of equity in their homes, they are prime targets for greedy and crooked creditors. We have seen mortgage sellers cold call elderly homeowners and then scam them into a loan which they do not need, can not afford, and which provides the seller with an incredibly large commission. Both federal and state law prohibit the mortgage industry from providing different loan terms to people based on race, sex, ethnicity, or other protected class. Such a transaction may be subject to a cause of action under the Unruh Civil Rights Act or other law. Equity theft also called equity skimming, refers to the situation whereby the same creditor refinances the same property with the same borrower multiple times and uses the equity in the borrower’s property.

How do I begin?

Here is an overview of how the ANLA program works:

1. ANLA will conduct a Forensic Loan Audit which scrutinizes the mortgage documents you received upon the closing of your loans(s) and look for TILA, RESPA and/or HOEPA violations by your lender. Once you receive your Audit, you will know what violations, if any, were committed in the handling of your loan. (Statistically, nearly every loan has at least some violations.) You can then decide if you should proceed to seek a remedy. If you do proceed,

2. A referral attorney can immediately file a Federal lawsuit on your behalf, and place a Lis Pendens on the property, to stop the foreclosure process (if applicable) and begin litigating your causes of action against the lender(s)

3. The attorney will reach a settlement agreement with the lender (most cases) or continue on to trial (rare situations) and demonstrate to a judge or jury how the lender has willfully failed to comply with Federal Law.

4. In most cases, it is NOT necessary for you to make mortgage payments while the lawsuit is pending.

5. It is also unlawful for the lender to report negative information about you to the Credit Reporting Agencies while the lawsuit is pending under the Fair Credit Reporting Act.