Mortgage Foreclosure & Refinance Resource

One aspect of the mortgage crisis that has been under reported is the extent to which predatory lenders have committed fraud against vulnerable homeowners. In some cases, con artists have deliberately targeted financially strapped and unsophisticated owners.

The nation’s largest subprime lender, Ameriquest Mortgage Co., is paying $325 million to settle a predatory lending lawsuit involving 481,000 consumers in 49 states. Among other things, the suit claimed, Ameriquest and its affiliates:

• Misrepresented or failed to disclose loan terms, such as whether the interest rate was fixed or adjustable;
• Charged excessive origination fees and prepayment penalties;
• Refinanced borrowers into improper or inappropriate loans;
• Inflated appraisals used to qualify borrowers.

Now the news comes of two more lawsuits dealing with predatory subprime lending:

Citi Residential Lending, a subsidiary of Citigroup that acquired Argent Mortgage this past summer is being taken to court on claims of predatory lending. The complaint states that have pushed overpriced loans and outlandish fees on victims who didn’t understand — and could not possibly have met — the terms of the contracts they signed.

A spokeswoman for Citi Residential said she could not comment on the case because of the pending litigation.

A federal lawsuit filed Thursday against an east Salinas, California housing development alleges that the developers and 10 other businesses used predatory lending, fraud and unfair business practices against Spanish-speaking homebuyers over the past two years.

The complaint says Salinas-area mortgage broker firms Universal Mortgage, IRA Mortgage and Creative Mortgage placed the plaintiffs in subprime loans instead of the best loans possible, then took undisclosed and excessive commissions from them.

Along with these brokers, the plaintiffs are suing Countrywide Financial, New Century, Cameron Financial Group and Wells Fargo banks, saying they approved illegal and unfair business practices committed against the plaintiffs.