Mortgage lenders are required to follow federal and state laws. These laws are designed to protect home-buyers from lenders who may charge them more than they should, who may not protect the home-buyer, and who may cause the home-buyer financial harm.
- The mortgagee is the lender that extends the loan – advances the money.
- The mortgagor is the person who obtains money in return for placing the home as collateral. Many home-buyers get a mortgage when they first buy a home.
- Homeowners can get second and later mortgages if their home has enough equity
- Equity is the value of the home minus the value of the mortgages and liens on the home
- A mortgage servicer is an entity that generally manages the mortgage. They collect your payments and send you the bills. They also review changes to the mortgage. Essentially, the mortgage servicer is the agent for the mortgagor.
According to Magnify Money, the average 2017 mortgage debt nationwide is $137.000. The new mortgages average $244.000
Some of the ways mortgage lenders violate the law
Florida real estate lawyers can hold mortgage lenders liable if the following events occur:
The mortgage lender:
- Doesn’t properly and promptly credit your account for payments you make
- Holds you in default even when you pay within the grace period
- Reports you to credit reporting agencies when you’re not in default
- Charges fees that aren’t legitimate. Generally, the mortgage lender can charge for late payments, property inspections, and costs of foreclosures. Other fees should raise a red flag
- Adds homeowner’s insurance to the monthly payments even though the homeowner already has homeowner’s insurance. This type of homeowner’s insurance, called force-place insurance, can be quite expensive. You may not need mortgage insurance if you have enough equity.
- Doesn’t use escrow payments to pay real estate taxes, homeowner’s insurance, and other bills. If the taxes are in default, the taxing authorities may seek to sell your home.
Once you are approved for the mortgage loan, the lender normally can’t change the annual percentage rate (APR) by more than 1/8th of one point. The fees the lender charges shouldn’t change. Increases in other expenses such as the cost of title insurance (which lenders require) should comply with the laws. Lenders can make some adjustments, if for example, your credit score changes. If you are being charged more by the mortgage lender than you expected and experienced Sebastian and Vero Beach lending attorney can assert your rights.