negative amortization home loan
I currently have a negative amortization home loan and was not told all the facts when obtaining this loan. I did not know that it was a negative amortization loan. No where on my paperwork said it was. I feel I was misrepresented big time. I heard a rumor that a lot of people are having a similar problem. What can I do about it? Is the broker liable at all for their actions? If I have any legal rights here, what kind of lawyer should I contact to help me?
1 Answer from Attorneys
Re: negative amortization home loan
I'd need the answers to a few more questions fairly early in discussing your situation. Did you deal directly with the lender, or did you go through a broker? Does the loan have payment options, where you're regularly sent a statement showing a minimum payment, a full-interest payment, and a fully-amortized payment, or something of this sort? Did you receive written disclosures? If so, were they silent on the "neg am" issue, or was it disclosed, but in technical gibberish? Is the negative amortization a result of interest rate increases on a fixed-payment, variable rate loan?
Lots of people are having problems with recent mortgages. We have come through a period of manic refinancing and experimentation with loan terms. Many families have been living off their appreciation by refinancing to pull out equity time and again. Now that rates are rising and appraisals are falling, all kinds of problems are surfacing due to poor work by brokers and lenders and unrealistic expectations of borrowers. It turns out also that there were a fair number of out-and-out rackteers working the home-mortgage trade in recent years.
I suggest considering a class action or joining a class action. I do not handle class action suits. You may be able to find a Web site that matches parties to class-action suits and I suggest you try Web browsing to find a firm or firms that can take your case or refer you to an existing case against this lender or this type of lending. They're looking for you!