How to Get Out of a Deceptive Home Loan

Deceptive home loan practices, such as tacking on exorbitant fees without adequate disclosure, often cause people to accept mortgage loans that they can't afford. As a result, according to "The New York Times," certain people default on the loans and lose their houses to foreclosure. Deceptive home-loan practices can be hard to prove. Mortgage companies usually make disclosures as required by law, but certain consumers may feel later that they were duped because they didn't fully understand the terms of the agreement. For example, consumers taking on adjustable-rate mortgages may fail to realize how significantly rates may increase once the rate adjusts. Getting out of a deceptive home loan usually means refinancing.

Instructions

1

Evaluate your home mortgage with the help of a government-certified housing counselor from the U.S. Department of Housing and Urban Development. Counselors are located nationwide. Contact your bank or credit union to locate a counselor near you. Take a copy of your mortgage to the meeting with the counselor.

2

Ask the counselor to review the terms of your loan for signs of deceptive home-loan practices. For example, tell the counselor if the agent for the mortgage company convinced you that your rate would not change for five years but it changed significantly after just one year. Make a list of all alleged deceptive home-loan practices based on your review with the counselor.

3

Set a separate appointment to contact the mortgage company in a three-way call with the Department of Housing and Urban Development counselor on the line. Outline the deceptive home practices and demand that the mortgage company modify or refinance the mortgage because of the practices. Follow up your request in writing. Loan modification allows mortgage companies to change any or all terms of a loan to make it more affordable.

4

Apply, officially, for loan modification with the help of the Department of Housing and Urban Development counselor. Demand a fair interest rate based on current market conditions and your credit, along with a fixed interest rate. See a real estate attorney if the mortgage company refuses to modify the loan. Direct the attorney to write a letter to the mortgage company threatening a lawsuit if it continues to refuse to modify the loan.