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    3 - Report Card

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    DiligenceGroup
    1. The borrower appears to have been the repeated victim of predatory lending practices over many years through cash-out refinances that increased his debt load and risk of default. The lender engaged in equity-stripping by encouraging annual refinances. 2. The loan granted appears unaffordable, as over 75% of the borrower's income was needed for mortgage payments. The appraisal may have been inflated, and the borrower's finances were not properly verified. 3. The borrower was misled into taking on additional construction debt through a second mortgage that failed to close, costing him money. Public records will be reviewed to investigate potential predatory and fraudulent

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    3 - Report Card

    Uploaded by

    DiligenceGroup
    263 views3 pages
    1. The borrower appears to have been the repeated victim of predatory lending practices over many years through cash-out refinances that increased his debt load and risk of default. The lender engaged in equity-stripping by encouraging annual refinances. 2. The loan granted appears unaffordable, as over 75% of the borrower's income was needed for mortgage payments. The appraisal may have been inflated, and the borrower's finances were not properly verified. 3. The borrower was misled into taking on additional construction debt through a second mortgage that failed to close, costing him money. Public records will be reviewed to investigate potential predatory and fraudulent

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    3- Report Card

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    1. The borrower appears to have been the repeated victim of predatory lending practices over many years through cash-out refinances that increased his debt load and risk of default. The lender engaged in equity-stripping by encouraging annual refinances. 2. The loan granted appears unaffordable, as over 75% of the borrower's income was needed for mortgage payments. The appraisal may have been inflated, and the borrower's finances were not properly verified. 3. The borrower was misled into taking on additional construction debt through a second mortgage that failed to close, costing him money. Public records will be reviewed to investigate potential predatory and fraudulent

    Copyright:

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    Download as PDF, TXT or read online from Scribd
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    263 views3 pages

    3 - Report Card

    Uploaded by

    DiligenceGroup
    1. The borrower appears to have been the repeated victim of predatory lending practices over many years through cash-out refinances that increased his debt load and risk of default. The lender engaged in equity-stripping by encouraging annual refinances. 2. The loan granted appears unaffordable, as over 75% of the borrower's income was needed for mortgage payments. The appraisal may have been inflated, and the borrower's finances were not properly verified. 3. The borrower was misled into taking on additional construction debt through a second mortgage that failed to close, costing him money. Public records will be reviewed to investigate potential predatory and fraudulent

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    of 3

    Originating

    lender

    ;VCS., lNC.

    Submit Appraisal for Triage - Potential


    LOAN INFORMATION

    ATCLOSING
    P&l (Fully Amortizing) / lnsurance / HOA Consumer Credit lender Housing Lender Back Debt Actual Housing n/a 390.00
    So.oo

    DOCUMENTS NEEDED
    1. Appraisal -

    triage recommended.

    City, State, Zip Code I BROOKLYN, NY 11208

    2, Copies of docs

    for 2nd lien that did

    not close.
    3. Review of public records

    Loan PurposelCash Out Refinance


    Loan Amount S i472,888.00 Estimated Value S 580,000.00

    Ratios not Calculated Ratios not Calculated

    rw/ crw 181.8300%


    / lnc.

    Actual Back Debt


    2nd Job - Bookkeeper

    Borrower Empl

    lFilletman /

    to evidence refinance of subject property on an annual basis. 4. Provide any contracts and payments 39t6 /s204=75.25% 3976 / s2o4=75.25% that were made for the construction Borr. Assets not Captured product. Did borrower lose money because the loan did not close?
    1. The borrower appears to have the victim of predatory, financially harmful and potentially fraudulent

    Closing Date Funding Date

    Loan Term in Years 20

    7/7/2008 1$ Rate Change Date n/a


    1st Pay Change Date n/a

    Amortizatlon Term 20 Year Amortization Prepayment Penalty n/a

    lending practices.

    Hard/Soft/Hybrid

    n/a

    Maturity Date 6/r/2028


    Loan Product 30 Year Fixed - FHA 6.5000% Teaser Rate % Rate Floor % Rate Ceiling % Max. % Per Change

    lndex nla Margin n/a Fully lndexed Rate Rounding Factor n/a

    borrower may have been targeted for predatory financing due


    2. The

    to his race.
    3. The appraisal appears

    to have been

    greatly inflated - appraisal triage


    recommended.

    look Back n/a


    Neg Amortization n/a Pay Option Feature n/a lnterest Only Feature n/a

    4%/ts

    TRIAGE REPORT/ BRIEF DESCRIPTION OF DOCUMENTED FINDINGS: 1. The borrower appears to have been preyed upon, on a regular basis, by the mortgage company that originated the borrower's lst mortgage. According to the borrower, the mortgage company called him on an annual basis and encouraged him to refinance his mortgage, According to the borrower, he paid off any credit card debt that accumulated during the year. Clearly, each time a borrower refinances, the loan balance must be increased to facilitate the repayment of the debt and the closing costs, thus effectively increasing the borrower's financial liability over time. The practice in which the lender appears o have been engaged is called "Equity Stripping" and is considered to be one of the most serious, destructive and predatory practices that a lender can commit, as it effectively decimates all of a borrower's equity over time, 2. The lender appears to have granted a loan that the borrower could not reasonably repay. The loan application reflects that the borrower's income and assets were not verified as the income and asset sections on the final loan application are blank. A review of the borrower's tax returns indicates that over 75% of the borrowers income had to be devoted to the repayment of the mortgage. Which such a significant portion of the borrower's income going to the repayment of the debt solely,

    anyminorincreaseintheborrower'sdebtincreaseshisriskof enteringintodefault. Thelenderappearstohavebeenengagedinpracticesthattheborrowerto engage in money management practices that cannot be sustained over time, are irresponsible and are unsound. According to the borrower, when he was no longer to refinance his home, the consumer credit debt that he had been used to repaying via cash out refinance through this lender, outpaced his capacity to repay and as a result, the borrower is facing the very real threat of foreclosure and losing all of the financial investment he has made in his home. 3. The appraised value of the subject property appears to have been greatly overstated to insure the granting of the mortgage loan. The estimated value of the home per the loan application is $580K. An on-line check of the home's value indicates that the most probably market value of the home totaled S503K. The borrower's LTV, instead of being 81% appears to have been closer to 94%. Ihe underwriter recommends that the borrower's appraisal be procured and subjected to the triage process to determine if the methodology used to establish the subject's value for the loan, was sound, and if the value the lender used to grant credit was supported. 4. The borrower indicated that he was actually seeking additional money that was to be used for building construction purposes. The lender apparently convinced the borrower to apply for a 1st lien with one lender, and then unbeknownst to that lender, attempt to secure subordinate financing with another lender, The proceeds of the 2nd loan were to be used to facilitate building construction. The borrower advised that he was approved for credit, and a closing date for the 2nd mortgage was set. He arrived at the appointed hour and place where the closing of the 2nd mortgage was to take place, but the closing agent did not show up. The underwriter does not know if the borrower had made any down payments, paid for plans, specs or construction cost breakdowns. lf the borrower paid for construction related services, and lost money as a result of the irresponsible actions of the closing agent and lender, the evidence should be brought forth. 5. Potential securitization issues (securitization report already performed, no additional review is required). Loan sold immediately to Countrywide via forward
    commitment.

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