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In Mortgage Debt? Federal Law May Be On Your Side

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While news reports continue to forecast rising foreclosure rates, there may be a solution for homeowners who think they’re trapped in a mortgage with no way out. Distressed homeowners already have plenty of legal firepower on their side...they just don’t know it.

“There have been hundreds of thousands–if not millions–of violations of predatory lending laws over the last nine years,” says investigative journalist Benjamin Dover, the creator of a new consumer-friendly website,

“There are four incredibly powerful federal laws that have been around for decades, but are relatively unknown or misunderstood to the average consumer: The Fair Housing, Truth In Lending, Equal Credit Opportunity and Real Estate Settlement Practices Acts collectively give hopeless homeowners plenty of leverage to play some serious hardball with their mortgage companies.”

Dover urges distressed homeowners to analyze their situations and get aggressive early in the game, long before their payments escalate out of sight and become impossible to make. Here are his Top 5 Red Flag Warning Signs that indicate you could be the victim of predatory lending and as a result, in an illegal loan: #1 Your loan was an Adjustable Rate Mortgage, or an "ARM". #2 Your monthly loan payment has increased more than $200 in the past year – or – if your monthly payment will increase by more than $200 in the next six months. #3 If your loan has a pre-payment penalty longer than three years. #4 If your home was originally appraised for a higher value than homes were selling for in your neighborhood. #5 Or, if your Realtor or title company steered you to a specific mortgage company.

If you answered 'yes' to two or more of these questions, Dover says you may have a case against your loan originator, the title company who closed the loan, the appraiser who provided your lender with the original appraisal, or the loan servicer—the company to whom you send your monthly house payment.

There are potentially hundreds of thousands—if not millions—of predatory lending victims spread across the country, but before the launch of Dover’s whistle-blowing website, there were no advocates informing distressed homeowners that they might have a case. As Dover points out, there is zero incentive for banks and mortgage companies to put homeowners on alert, for obvious financial reasons.

As for those consumers who may have already been contacted by their mortgage company about re-writing their loans, Dover cautions: “Before you jump on offers to reduce your principal balance and re-write your loan, consider who put you in the financial mess you’re in in the first place. You’re not really going to trust them to give you the best possible deal and rewrite your loan, are you?”

Dover’s company, has retained Dr. Gary Lacefield, one of the nation’s leading experts to handle mortgage audits for distressed homeowners. A former enforcer for the Department of Housing & Urban Development (HUD), Lacefield personally negotiated and drafted the six largest lending settlement agreements in HUD Civil Rights history, totaling over $10 billion.

Dover and Lacefield’s plan to save the American dream is simple. “Our goal is to re-write or “recast” these illegal loans. “We want to help keep people in their homes,” says Dover.

Author Benjamin Dover's written two best-selling books. Life After Debt: The Blueprint for Surviving In America's Credit Society and Back Off! The Definitive Guide To Stopping Collection Agency Harassment. His popular column, Ask Ben, appeared weekly in The Dallas Morning News from 1998 – 2004 and his expert commentary, advice, tips and strategies have been featured in some of the nation's leading newspapers and magazines for almost two decades.

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