Falsified My Loan Application and Gave a Mortgage I can't Afford

This is a million dollar question, and one that comes up a lot, unfortunately.

There was a lot of this sort of thing occuring a few years ago, but rarely did the broker or lender act alone.

Were you presented with the documents that had falsified statements on them? Did you sign them? If so, you may be considered part of the fraud … which I know may not seem fair, given the loan officer’s level of responsibility to explain things thoroughly and completely …but you should be ready for that possibility and be as honest with your case as you can be about what you did and did not understand at the time.

Do you feel that the loan documents were changed AFTER you signed them, or without your knowledge? If so, you may have a more clear cut case.

First, gather ALL of your loan documents. If you were not given copies of everything, contact the title company or attorney that closed your loan and request a copy of your entire file. You want your first drafts, your final drafts, etc. – all of it. Go over the documents carefully. Can you tell where things went wrong? What part of the loan do you feel was falsified? Knowing exactly WHAT went wrong or what was misrepresented will put you ahead of all the people that are just jumping on the band wagon and saying “I got a bad mortgage”. A lot of these people are probably right (and you may be, too!), but it is hard for attorneys and state regulatory authorities to know who has a real case when the details aren’t clear.

Gather any and all income documents that you gave the lender at the time when you applied. Depending on the type of loan you have and who wrote it, you may have been asked for a lot or next to nothing – but make a list of what you gave them and have those documents hand.

Make a list of everyone that you know that assisted you with your loan – the loan officer, the broker, the lender, the attorney or title company, any coborrowers or family members that helped you with gift funds or co-signing … they may not all be at fault, but it will be important to know who was involved.

Once you have the best possible understanding of what you think happened, based on your documents, get some help. You may speak to a local reputable attorney, or call the servicer of the loan (who is likely NOT the broker) to let them know that you think the loan may be falsified and that you are having trouble paying it. Ask what help is available to you. Remember – if you signed the documents with the falisified numbers, the lender may want to hold you responsible as well – be prepared for that, and be as honest as possible for the get go.

A number of consumer advocacy groups have been set up to help folks that have troubling loans. I can’t endorse any one or another, but here are some (and there will be more in your local area) – check with your local division of banks and community organizations:

National Mortgage Help Hotline (“Hope Now”): 888-995-HOPE (4673).

HUD (Housing and Urban Development)’s hotline: (800) 569-4287.

The Federal Trade Commission’s consumer hotline: 1-877-FTC-HELP

This site keeps a list of local contacts here:

http://www.mortgagenewsdaily.com/MortgageFraud/NationalResources.asp There is also more help that can be found here:

http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea04.shtm http://makinghomeaffordable.gov/ http://www.freddiemac.com/avoidfraud/  

Best of luck!