Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Hi.  can any one here help learn how to figure this out. 

Loan from private party in 2004 in Calif. for home loan.  Note for one year, but when it expired lender kept accepting payments and said he would do a new note, but never did. 


So far this what I have.  No TILA, No rescission, and I think I got something too under Usury Law violation.

Here is what it is:


10-13-04

Borrower's Estimate Settlement Statement

$185,527.22

10 -20-04

Note and Deed of Trust

$197,141.82

10 -21-04

Borrower's Closing Statement

$185,566.82


Difference of $11,775.00 (no idea what it is for).  Day I sign note and deed of trust, it was different amount. Lender say it was previous company and foreclosure costs.



I think what I read under Cal Usury Law, that $11,775.00 is considered interest for the lender.


So what I need help is how do I use my calculator to figure out interest?

Note say 5% per annum.

That means based on the note, I pay 5%  on the $197,141.82.  But, $11,775.00, means pay interest on the interest  -  yes?



I need to determine what was the real interest I paid, factoring in the $11,775.00 is all interest. 

Hope this makes sense and some body knows how to tell me how to calculate.

thank you so very much in advance.



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"I think what I read under Cal Usury Law, that $11,775.00 is considered interest for the lender."




no. you are S.O.L.!!!!!!!!!!!!!!!!
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Your message is quite confusing.   That is what I said.   The 11K is interest for the lender.

What does SOL mean?

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Saeedi if you think my message is confusing just read your's!!!!!!!!! 
no monthly pymts listed!!!!!!
no details of contract!!!!!!!
no Principle or interest listed on pymts !!!!
the contract was over in1 yr but you strangely keep on making payments after it expired!!!???!!!???!!??!!!!????   WHY????????
 
your 3 items in your box chart have nothing to do with anything!!!!!!!!!!!
they dont match up with your other figures!!
 
then you say " That means based on the note, I pay 5%  on the $197,141.82.  But, $11,775.00, means pay interest on the interest  -  yes?"
so i replied   "no. you are S.O.L.!!!!!!!!!!!!!!!!"
you dont have a handle on usury, math,  basic reading skills, or common sense!!!!!!!!!!!!
(S.O.L. means sh*t outta luck!!)



 

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Dear Saeedi,
    I'm not sure about this, but here goes anyway: Every loan has certain
costs associated with it. The borrower can either pay those costs up front
and have them deducted from the loan, or he/she can add those costs to
the principal of the loan and pay them off over the course of the loan.
    It appears that you chose the second option and added those costs to
the amount of the loan. This is why your principal is higher than you expected. Normally, those costs, called "points" are documented in the closing statement, which you apparently never got or else you lost or mis-
placed it.
    Obviously, you are new to this country and the American way of doing
things. Usury is usually written into the State Constitution. When the USA
was on the "gold standard" prior to 1968, most States had an interest limit
of 6%. Anything above that was considered "usury" and could result in a jail
sentence for the lender. After 1968, most States, like Florida increased the
maximum interest to 18% because of the "fiat currency". Unfortunately, the
Banks got the Federal Government to elliminate all "usury laws". You already
know why, there was a change in "who rules America"! Forgive us Lord!
   
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Thank you very much, Mr. Mike.  You are most kind.  Yes, I am knew to this country.  The numbers I put here are what on documents.  A American friend say I should research because note and deed do not match closing statement and that extra amount should be on documents say this is what for.

I know I am uneducated on this so I am learning.  Did not mean to upset anyone.  Thank you very much for your definition. Most helpful indeed.

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Saeedi,

Looking at what you have presented, tells me you have a bigger fish to fry than Usury violation. 

You've got conflicting legal documents that could sink this lender.   If you cannot afford an attorney, go to your county court.  California courts have help centers.   They can direct you to organizations that may be able help.

You need a forensic audit of the loan. 

You're on the right track.




Saeedi wrote:
Hi.  can any one here help learn how to figure this out. 

Loan from private party in 2004 in Calif. for home loan.  Note for one year, but when it expired lender kept accepting payments and said he would do a new note, but never did. 


So far this what I have.  No TILA, No rescission, and I think I got something too under Usury Law violation.

Here is what it is:


10-13-04

Borrower's Estimate Settlement Statement

$185,527.22

10 -20-04

Note and Deed of Trust

$197,141.82

10 -21-04

Borrower's Closing Statement

$185,566.82


Difference of $11,775.00 (no idea what it is for).  Day I sign note and deed of trust, it was different amount. Lender say it was previous company and foreclosure costs.



I think what I read under Cal Usury Law, that $11,775.00 is considered interest for the lender.


So what I need help is how do I use my calculator to figure out interest?

Note say 5% per annum.

That means based on the note, I pay 5%  on the $197,141.82.  But, $11,775.00, means pay interest on the interest  -  yes?



I need to determine what was the real interest I paid, factoring in the $11,775.00 is all interest. 

Hope this makes sense and some body knows how to tell me how to calculate.

thank you so very much in advance.



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Sara

Saeedi wrote:

I know I am uneducated on this so I am learning.  Did not mean to upset anyone.  Thank you very much for your definition. Most helpful indeed.

Saeed, it doesn't matter whether you are new to this country or not.  Not many people understand real estate laws or mortgage financing until they start investigating.  That's when you get a "real" education. 
 
Wishing you the best!
 
S
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Saeed I can help you but i need a few things to get started

a. did you signed a loan from a private person to buy a home??  yes or no

    how good to you KNOW & TRUST this private loan person?

b. if so was the amount $185,527.22 ??   yes or no

c. if it 5% agreement i need to know what your monthly pmts are $____________ ????

d. did the loaner tell you what yourPrinciple and interst was?  if so what were they?????

e.  WHY did you keep paying after 1 yr if your note was only for 1 yr??????????????

f. was the note intended to be longer than 1 yr???

g. How many pmts did you make AFTER the 1yr was up????

h.

 

If we assume 5% on 197,141.82 and base it on 20yrs

Your  $11,775.00 in interest for the first year is about right!!!!!

That’s based on $1301 per month for 20 yrs!!the first year you pay roughly about 78Times more in interest than you would in the last (20th yr)!!!!!!!

The important thing here is the contract you signed!!!!!!!!!!if its really for only 1 year and not the 20 years I expect then let me know!!!!!!!usually

If your note was for 1 year your payments would be about $16877 a month!!!!!!!!!!!!!!   20 yrs would be about $1,301 a month and both figures include interest!! important: 5% interest per yr does not mean EXACTLYprinciple times 5%!!!!!!!      It is slightly higher!!!!!!!!!!!!               

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I’ll put 5-bucks on the following:

 

All of the fees, expenses, points, and the kitchen sink were added to the principal.

 

The interest was set at 5% just to make it look like a great deal.

 

A 20 or 30 year amortization was used to calculate the payments.

 

There is a one year balloon payment.

 

Once you add in the points, and all of the other junk fees, the interest rate is way north of 5%.    

 

At the end of one year the scammer gets the house through foreclosure and the amount owed is more then what was borrowed.  The payments made for the 12-months were simply icing on the cake.  In the first 12-months 99% of the payments go towards interest.

 

One final thought - Did the purchaser make a down payment, or if the borrow already owned the property, was there any equity?  If there is no equity today then the scammer may have scammed himself.  Generally these types of scams only work when property values are rising or there was lots of equity when the scam went down.

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Saeedi I can help you but i need a few things to get started


Q. did you signed a loan from a private person to buy a home??  yes or no



Answer - No.  Refi.  Private person yes, buy, no.





Q.   how good do you KNOW & TRUST this private loan person?



A -  Kind of well.  My company closed.  We go low on money.  We go in foreclosure.  He tell my cousin he want to help.  We go see him and he say he can help us.  Our kind should help each other. So I thank him.  He keep saying to me, no worry, I look out for you.





Q.   if so was the amount $185,527.22 ??   yes or no


A - Week before sign loan, we get list of costs for loan amount.  It say $185,527.22.   But day we meet  to sign  loan is $197,141.82.  I say, what going on? He say previous lender.  I sign cause if don't we lose home.




Q. if it 5% agreement i need to know what your monthly pmts are $????


A -  5% per annum.  One year.  $1,000 per month.




Q. did the loaner tell you what yourPrinciple and interst was?  if so what were they?????

A -
Note say 5% per annum.  One year.  $1,000 per month.



Q.  WHY did you keep paying after 1 yr if your note was only for 1 yr??????????????  . was the note intended to be longer than 1 yr???



A -  Was to be 30-year and he later sell note or I refi. But day I sign papers he say 1 year and then if I pay on time, he extend note.   After year I kept making payment and he no say anything.





Q. How many pmts did you make AFTER the 1yr was up????




A -  17 straght months.





Q.   If we assume 5% on 197,141.82 and base it on 20yrs

Your  $11,775.00 in interest for the first year is about right!!!!!



A.  The 197K on note and deed, but cost statement before and after say 185K.  The 11K was unkwon only put on note and deed day I arrive to sign. 

I look on interet and TILA say he did not give 'disclosure of costs."  I find Usury and it say 'no disclosure = benefit of lender only' that makes it interest only.  It say private lender can no charge over 10% or 5% over fed rate.  I look and fed rate that month was 2.75 percent.  That mean private lender no charge no more than 7.75 percent.  I no know how to do formula to find how much the 11K in interest make 5%.  You see, yes?



Q. That’s based on $1301 per month for 20 yrs!!the first year you pay roughly about 78Times more in interest than you would in the last (20th yr)!!!!!!!


A.  I no know what that is.  1st pay say 822.25 int. and 177.74 principal.  Next pay say 821.25 int. and 178.49 principal and so on and so on.




Q. The important thing here is the contract you signed!!!!!!!!!!if its really for only 1 year.

A.  One year note and it say I can have second on my home.  No know about contract.  Many pages on back of deed of trust that say contract.  I sign.  It be 1 year loan. 


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Saeed that’s a 30 yr $197141 note based on what you say it would be about $1,058 per month for 360 months!!!thats about $8931 in interest the 1st yr!!!the rest is principle!!!

what really bothers meis that it appears to be a 30yr note but your contract only deals with ONE year!!!!!!!!!very weird!!!!!!!!!!    But you need to go with the $197,141 figure to start with because thats what you sign!!!!!!!!!!!!!!!!!!!!!!   I see now my 30yr estimate was right!!!!!

What does this man say when you ask him about why the note wasnot extended??????? Do you have his name, address, phone and email??????????

my feeling is your a honest man but i think he took advantage of you!!!!!!!!!!!!! GO SEE HIM, CALL HIM, EMAIL HIM AND LET ME KNOW WHAT HE SAYS!!!!!!!!like every country we have very honest people and some very evildishonest people!!!!!!!

What state are you in?????Saeed I dont feel good about this at all!!!!!!!!

Unfortunate you must keep making pmts. I will guess he has a foreclose clause in the contract you signed so it is URGENT you read the fine print!!!!!!!!!!!!!!!!!!!asap!!!


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Yes.  It was to be 30 yr. loan.  Day I go sign papers it is 1 yr note and he say he see how it goes with me paying on time.

I learn too late he  do fraud on me. He already foreclosed and took home.  He using it for rental. 

Please forgive.  I am try to learn formula so I know interest so I can go get help.







oots wrote:

Saeed that’s a 30 yr $197141 note based on what you say it would be about $1,058 per month for 360 months!!!thats about $8931 in interest the 1st yr!!!the rest is principle!!!

what really bothers meis that it appears to be a 30yr note but your contract only deals with ONE year!!!!!!!!!very weird!!!!!!!!!!    But you need to go with the $197,141 figure to start with because thats what you sign!!!!!!!!!!!!!!!!!!!!!!   I see now my 30yr estimate was right!!!!!

What does this man say when you ask him about why the note wasnot extended??????? Do you have his name, address, phone and email??????????

my feeling is your a honest man but i think he took advantage of you!!!!!!!!!!!!! GO SEE HIM, CALL HIM, EMAIL HIM AND LET ME KNOW WHAT HE SAYS!!!!!!!!like every country we have very honest people and some very evildishonest people!!!!!!!

What state are you in?????Saeed I dont feel good about this at all!!!!!!!!

Unfortunate you must keep making pmts. I will guess he has a foreclose clause in the contract you signed so it is URGENT you read the fine print!!!!!!!!!!!!!!!!!!!asap!!!


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Knows About TILA
As was pointed out above, federal legislation -- I believe the Garn-St. Germain Depository Institutions Act -- preempted state usury laws when a loan is secured by real estate.  So it is unlikely that there was a usury violation.

Federal TILA and Regulation Z is another matter.

The Federal TILA and Federal Reserve Board's Regulation Z specify how the annual percentage rate is to be computed as well as the required disclosures.

The "bait and switch" tactic with the financing terms is characteristic of subprime and predatory lending.  One problem in these situations is the borrower VOLUNTARILY accepting onerous terms under duress. 

TILA DOES have some fairly strong consumer protections.  Unfortunately, most borrowers do NOT study up on these and very often relinquish their rights by failing to aggresively assert them.

You mention that the foreclosure is PAST.  In judicial foreclosure states, the game would probably be over.  When the foreclosure is court supervised, Court Rules usually require a defendant to plead counterclaims arising out of the same set of facts or transactions.  That is, in failng to assert your rights in teh form of a conterclaim, you may WAIVE these rights.

But most mortgages in California are by deed of trust with a private right of sale by the named trustee.  This private right of sale typically bypasses the courts in most states (I am UNFAMILIAR with the specifics of California law).  In such an instance you may NOT have been required to present any counterclaims.  You MIGHT then still have a valid causeofaction under TILA or other laws.

THIS IS GOING TO BE A TREACHEROUS AREA.  YOU REALLY NEED A GOOD LAWYER TO SUCCEED.  TRY TO FIND AN EXPERIENCED CONSUMER DEBT LAWYER FAMILIAR WITH TILA.

Also, bear in mind that property values in California have been plummetting.  Many properties are now "under water" or "upside down", that is the mortgage amount well exceeds the market value of the property. 

In proceeding, you also need to ask yourself whether there is really VALUE THERE to fight over.  If the nominal mortgage balance EXCEEDS the value of the property, you may very well find that the expense of the fight is NOT worth the end result. If, by contrast, there was substantial remaining equity, then you need to really study the matter and get some good legal help.

While there is an impulse to want to FIGHT for your property, there really ARE many situations where the correct economic decision is to abandon the upside down property to the lender.  Study the matter and make a decision based upon reason rather than emotion.  Do what makes good economic sense!
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Knows About TILA
As to APR calculations, Regulation Z shows what should be included in teh "Finance Charges" and how to determine the "Amount Financed".  Then one applies an "actuarial method" which is used to calculate the implicit rate of return based upon the various cash flows.  This is set out in basic elementar finance textbooks.

I think that a good Google search using search terms such as "finance charges", "amount financed", and APR might get you some pretty good results.  Similarly, try searching under topics like "time value of money", "rate of return" and actuarial method.

I do NOT have time to search for you right now, but perhaps some other Forum participants can help you find the right articles.  With a knowledge of the methodology, rules on what constitutes finance charges and an Excel spreadsheet the calculation is elementary. 
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dear TILA

may i respectfully suggest that i believe you are in error when you said

" it is unlikely that there was a usury violation."

 

keep in mind while banks and private people have different roles in loaning responsibility and rules each can violate usury laws!!!!!!!! also keep in mind it is much easyer for a private person like the one who saeedi signed a contract with to violate usury laws. usury as far as i know can easily occur on a real estate deal!!!!!!!!! Please don’t make him think it does not apply at this very early stage!!!!!without having more info i cant say if usury happened to saeedi
but appears likely if what saeedi
said is accurate especially since the potential violater was a private person!!!!!!!!!!!

 

one more thing and pleasetake no offense but while telling somebody to get a good legal help is almost always sound advice most people in here (not all of them)are usually here because they dont have the $$$ to pay for expert legal advice!!!!!!!!!!

 

it is too early to tell but so far it appears saeedi
 wasnt treated honestly orfairly!!!!!!!!!!  

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Knows About TILA
Quote:
Originally posted by oots:

dear TILA

may i respectfully suggest that i believe you are in error when you said

" it is unlikely that there was a usury violation."



oots:  It would probably be at least mildly useful to become self-informed before conseling others, particularly in matters of law!

I would refer you and others to 12 U.S. Code § 1735f–7a:

§ 1735f–7a. State constitution or laws limiting mortgage interest, discount points, and finance or other charges; exemption for obligations made after March 31, 1980
 
(a) Applicability to loan, mortgage, credit sale, or advance; applicability to deposit, account, or obligation

(1) The provisions of the constitution or the laws of any State expressly limiting the rate or amount of interest, discount points, finance charges, or other charges which may be charged, taken, received, or reserved shall not apply to any loan, mortgage, credit sale, or advance which is—

(A) secured by a first lien on residential real property, by a first lien on all stock allocated to a dwelling unit in a residential cooperative housing corporation, or by a first lien on a residential manufactured home;

(B) made after March 31, 1980; and

(C) described in section 527(b) of the National Housing Act (12 U.S.C. 1735f–5 (b)),

...

http://www.law.cornell.edu/uscode/html/uscode12/usc_sec_12_00001735---f007a.html

Although (C) above seems to limit the applicability to certain institutional loans, the actual provisions of 1735f-5 includes this tidbit:

(C) is eligible for purchase by the Federal National Mortgage Association, the Government National Mortgage Association, or the Federal Home Loan Mortgage Corporation, or from any financial institution from which it could be purchased by the Federal Home Loan Mortgage Corporation; or

*

Thus ANY loan secured by a lien on real property is EXEMPT from State usury laws if it is eligible for sale to FNMA and FHLMC.  To assure exemption, most lenders, even private lenders use the standard FNMA or FHLMC fors for promissory notes and mortgage security instruments.  Courts have very liberally interpretted the provisions to include ALL loans which MIGHT be subject to purchase by FNMA and FHLMC, which is virtually EVERY residential mortgage.

I was mistaken in citing Garn - St. Germain, though.  THis provision comes from the Depository Institutions Deregulation and Monetary Control Act of 1980.  Garn-St. Germain was enacted two years later in 1982.

I would AGREE with you that private lenders are often less rigorous about dotting the "i"s and crossing the "t"s and I believe that the possibility that there was a TILA violation are very real.

Opinions can be useful, but when counseling someone in a delicate matter, it is helpful to give advice and share opinions when they are at least well researched and/or well informed.
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Dear TILA

thank you for your info imo this site really needs legal advise but i suspected  your use of the Garn - St. Germain example was not a good source for a different reason!!!its true that real estate deals are a different situation for many reasons( but what i was talking about was after separating out charges like late fees,administration costs, charges for  corporate advances,inspection fees legal fees etc   then the loaner is stillobligated not to abuse the raw interest (5%in this case)quoted in the contract!!!!!!!!!!!    

I’m not talking about usury ceilings!!!!!!!i’m talking about illegally hiding a higher interest rate than agreed   within the things I underlined above!!!!!!!!!!!!!there is good reason to believe this may have been done to saeedi but I need more info to determine if thatoccurred!!!!!!!!!!!!!!!

And lets keep this friendly i said “it is too early to tell but so far it appears saeedi wasnt treated honestly or fairly!!!!!!!!!!”  

then you reply”
Opinions can be useful, but when counseling someone in a delicate matter, it is helpful to give advice and share opinions when they are at least well researched and/or well informed. “

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Knows About TILA
oots:

I AGREE with you that the information posted indicates that Saeedi was NOT treated honestly or fairly.  I also AGREE with your assessment that certain charges at closing are REQUIRED under the law to be treated as a part of the finance charges and must therefore be included in the calculation of the Annual Percentage Rate (APR) for the loan.

This IS generally covered by the Truth In Lending Act (TILA) and the Federal Reserve Board's implementation of TILA in Regulation "Z".

My point was merely that Saeedi proabably needs to focus on TILA rather than state usury statutes.  The Depository Institutions Deregulation and Monetary Control Act of 1980 generally precluded application of state usury laws to mortgage loans after 1980.

I certainly wish Saeedi the best! 
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TILA i agree!
   Saeedi  lets hear from you!!!!!!!!!!!!!!!we need blanks filled in!!!   so we can help you!!!!TILA is a lawyer which im not!!
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This thread is very informative.

I was curious about Knows Tila wrote, so I did some digging and here's what I found.  He is sort of correct.




Cal DOJ website: http://ag.ca.gov/consumers/general/usury.php

Has basics on consumer rights and explains that Usury lase applies to private lenders because licensed lenders and real estate brokers are excluded.





California Usery Law

Stimmel, Stimmel, & Smith: http://www.stimmel-law.com/articles/Usury_Law_in_California.html


    In regard to usury, a loan used primarily for home improvement or home purchase, the allowable rate is the higher of 10 percent or 5 percent over the amount charged by the Federal Reserve Bank of San Francisco on advances to member banks on the 25th day of the month before the loan (if the agreement to loan and the actual lending of the money are in different months, the 25th day of the month before the earlier event is used).

    Example:  As of June 15, 2007, the applicable FRB rate was 6.25 percent, meaning that any non-exempt loan bearing interest at greater than 11.25 percent would ursurious.  Maximum interest rates refer to the simple interest rate on the unpaid balance.

    Defendant Argument:  The lender argued that the borrower had waived the usury defense through the broad suretyship waivers in the guaranty. The court held that because the usury law voided the interest provision, the suretyship waivers did not apply to the usury defense.
    Penalties: Penalties placed upon the violator of the usury laws is forfeiture of all interest (not just the usurious part) of the Note.



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