Auto-Loan-Financing.com has scoured the web to find the best financial articles to help peole repair bad credit or fix their
personal finances. Each article is written by leading finance or automotive industry experts.
Having second thoughts about the loan? The Truth in Lending Act gives most home equity borrowers at least three business days after closing to cancel the deal. This is known as your right of "rescission." In some situations (consult with your attorney), you may have as much as three years to cancel. To rescind, you must notify the creditor in writing. After you rescind, the lender has 20 days to return all money or property you paid to anyone as part of the credit transaction and release any security interest in your home. You must then offer to return the creditor's money or property, which may mean getting a new loan from another lender.
High-Rate, High-Fee Loans
The Home Ownership and Equity Protection Act (HOEPA) may give you additional rights if your loan is a home equity loan, second mortgage or refinance secured by your principal residence and if:
the loan's APR exceeds by more than 8% the rate on a Treasury note of comparable maturity on a first mortgage, or the loan's APR exceeds by more than 10% the rate on a Treasury note of comparable maturity on a second mortgage.
the total fees and points at or before closing exceed the larger of $488 or 8% of the total loan amount. (The $488 figure is for 2003 and is adjusted annually.) Credit insurance premiums written in connection with the loan count as fees for this purpose.
If HOEPA applies:
A lender may not engage in a pattern or practice of lending based on home equity without regard to the borrower's ability to repay the loan.
You must get certain disclosures from the lender at least three business days before closing.
Your lender cannot make a direct payment to a home improvement contractor.
Certain loan terms are illegal - such as most prepayment penalties and increased interest rates at default.
In most situations, your loan cannot have a balloon payment due in less than five years.
Due-on-demand clauses may not be used unless the consumer defaults.
A lender that has made a HOEPA loan to a borrower generally may not refinance that loan into another HOEPA loan within the first year.
Your lender may not call a one-time loan a line of credit.
A high-rate or high-fee loan might be right for you, but be aware of the risks. These loans are extremely expensive ways to get money. You could lose your home if you can't make the payments.
Where to Complain
If you think your lender has violated the law or you want information about a right to rescind, contact a private attorney, your state's Attorney General's office or banking regulatory agency, or the Federal Trade Commission.
For More Information
The American Association of Retired Persons has information about predatory lending. You can access information by phone: toll-free 1-800-424-3410; by mail: AARP, 601 E Street, NW, Washington, DC 20049; or on the Web: http://www.aarp.org/consumerprotect-homeloans/.
Article content is copyrighted by their respective authors. Auto-Loan-Financing.com makes no claim to ownership of the
articles. The Articles provided are solely for educational and informational purposes and do not constitute legal or financial
advice. Files, source code, page layout, and design contained herein are the intellectual property of Auto-Loan-Financing.com
and may not be reproduced without the express written consent from Auto-Loan-Financing.com.
The Articles provided are solely for educational and informational purposes and do not constitute legal or financial advice to
erase, fix, or repair bad credit.
