Millions of Homeowners Get Paid Very Little for Lender Violations

On Oct. 31, 2012, the Consumer Financial Protection Bureau (CFPB) released their Supervisory Highlights report, and just in time for Halloween, as the findings were indeed spooky!


According to the report, many lenders violated federal laws, such as the Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act (TILA), and the Home Mortgage Disclosure Act (HMDA). These lender violations came at a cost.

The CFPB requested these violating lenders take corrective action to the tune of $435 million paid to about 5.7 million consumers who were harmed by violations (an average of $76.32 per consumer).

The CFPB also announced a new appeals process for financial institutions that do not agree with the CFPB’s assessment, which in my opinion provides an opportunity for the lenders, not the homeowners.

What action should you take against your lender?

Since the average payout to a homeowner was only $76.32, getting forensic or securitization audits although informative, may be a waste of money. So, don’t be mislead by an attorney that you are guranteed a large cash settlement or “free and clear” home because if it sounds too good to be true, it usually is.

So is there anything a homeowner can do?

Take the path of least resistance! For example, a loan modification if done right can cut your payment in half, and on average, saves homeowners $3,600 to $6,000 in the first year — let alone all the money you save over the life of the loan!

So, when a homeowner compares the potential savings of up to $6,000 in the first year through a loan modification versus getting $76 from a settlement resulting from the lender breaking laws, it seems like an easy choice.

Find out what will be profitable for the lender PRIOR to speaking with your bank.

The banks language is dollars and cents and their goal is minimize their investors’ risk and maximize their profits. Once you know that a modification is more profitable to the lender than a foreclosure, you can present yourself to the bank in a way that is a true win-win scenario, where you get a reduce mortgage payment and the lender profits.

Since, this information is not typically made available to consumers and not volunteered by your bank, working with a specialized organization, such as The Homeowner Defense Network, is the ONLY way to get it. Contact us today to learn more!


About Brett Robbins

Brett Robbins is the founder and CEO of The Homeowner Defense Network. The HDN offers systems that help homeowners discover what programs they may or may not qualify for and why in less than a week. The HDN also has a trusted network of mortgage relief service providers, and offers a proven credit education program.

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