Foreclosure Lawyer Midvale Utah
If you are a victim of predatory or subprime lending and you are facing foreclosure, consult an experienced Midvale Utah foreclosure lawyer today. You can save your home from foreclosure.
Subprime lending is not a new business. Lending to people with blemished credit histories has been around seemingly for as long as there have been creditors and debtors. Examples of the long-standing tradition of subprime lending in the United States run the gamut from pawnshops to the more positively regarded community development home loans. Subprime lending has, however, changed since the 1980s as the technological, macroeconomic, and legal frameworks in which these transactions take place have evolved, giving rise to increasingly sophisticated operations and substantial growth. Accompanying this growth has been the notable emergence of predatory home mortgage lending within the subprime credit sector. This chapter argues that deregulation and increased access to investment capital have interacted with preexisting credit market dynamics in ways that have made increases in high-fee predatory home mortgage lending among nondepository lenders predictable if not inevitable. It concludes with a discussion of whether the nation’s storied depository institutions have been or may yet be similarly corrupted—and the resulting implications for American consumers.
For many years, subprime lending was the province of pawnshops and finance companies that were typically restricted in the amount of fees and even the rates of interest which they could charge. These enterprises were readily recognizable and identifiable as lenders of if not last, at least second, resort. But increasingly, household names of creditors like Citi and Wells Fargo have become attached to subprime suffixes like Financial. If these changes represent a transition of subprime lending into the mainstream and a commensurate increase in access to fairly priced credit, they will no doubt be widely welcomed. However, if these changes serve to leverage the formidable economic and political power of large, legally favored institutions to promote abusive lending, a contentious debate is likely to ensue.
Congress’ initial response to the emergence of abuses within the subprime lending market, the Home Ownership and Equity Protection Act of 1994 (HOEPA), has been viewed by many as inadequate to stop predatory lending. In fact, the law’s failure to include the full range of home loans (completely omitting home purchase loans and open-end loans such as home equity lines of credit) and its numerous loopholes for points and fees (prepayment penalties in particular) provide ample opportunities for predatory lenders to evade the legislation. Despite HOEPA’s enactment, the total cost of predatory lending to U.S. consumers in 1999 alone was estimated at more than $9 billion.
Within subprime home lending, technological advances have given rise to fantastic increases in the cost-effectiveness of customer identification and mass marketing as well as the ease with which creditors can navigate state laws.
Traditionally, credit has been among the most regulated of products. Major religions and nations have set maximum permissible rates of interest, with such regulation falling under the rubric of usury. It is not without reason that credit has been viewed with some skepticism and trepidation. Few other decisions have the continuing cost or the singular ability to alter an individual or family’s welfare that the act of signing a loan agreement as. Borrowing to buy a home can build equity and economic security but on the other hand, lending abuses decimate families and harm whole communities.
In fact, to the extent that these high fees deter borrowers from refinancing when higher rates would not, they can properly be seen as anti-competitive terms that offer borrowers little to no offsetting advantages. If a borrower receives a loan with an interest rate that is too high for her risk profile, another lender can simply offer to refinance at a lower rate, thereby denying a would-be predatory lender the future excess interest. To be sure, the borrower loses the excessive interest paid before she refinances; however, such an outcome stands in contrast to a high-fee loan where the lender locks in profits through fees at the time of origination, effectively prohibiting any lender from competing to offer a better deal.
Unfortunately, to date, regulators and the courts have been slow to comprehend and address this distinction between interest rates and fees. For example, the Supreme Court has actually articulated a premise clearly at odds with the foregoing logic: “there is no apparent reason why home state-approved percentage charges should be permissible but home-state approved flat charges unlawful.”
In a historical context, federal policy makers’ failure to act on this distinction may not have been significant, since in the United States, the structure and terms of credit have customarily been regulated at the state level. While these state laws have varied in the level of protection afforded consumers, several developments at the federal level have made it easier for unscrupulous lenders to lure borrowers into abusive loans, particularly high-cost, high-fee loans. First, Congress has explicitly deregulated certain types of home loans, explicitly allowing charges that would otherwise contravene state law to be levied by a broad class of lenders. Second, federal law has blurred state boundaries by allowing certain lenders to charge rates and fees based on their home state’s law in all other states. Third, and finally, federal law has provided consumers with incentives to prefer home secured debt over non-secured debt.
Deregulation of Certain Types of Home Loans And Foreclosure
Perceiving a credit crisis in the home loan market resulting in part from the application of state usury caps in a rapidly escalating interest rate environment, Congress moved to deregulate and pre-empt conflicting state law on a broad set of first-lien home loans and laws restricting “alternative” mortgages.
First, the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDA) pre-empted the “constitution or the laws of any State expressly limiting the rate or amount of interest, discount points, finance charges, or other charges” on extensions of credit secured by a first lien on a home (12 U.S.C. 1735f-7a(a)(l)). The legislative history of DIDA specifically provides that this provision pre-empts only state laws related to interest and certain other charges. As a result, the corresponding regulations expressly disavow pre-emption of any “limitation on prepayment charges, attorneys’ fees, late charges or other [charges not included in calculations of APR].” Second, in a further limitation, DIDA provides that states may restore their laws on points and fees at any time through legislative action (though the deadline for states to opt out of interest rate pre-emption expired in 1983).
Despite these limitations, by pre-empting prior state laws that limited fees on first lien home loans, Congress has nonetheless provided substantial leeway for lenders bent on stripping home equity through fees. In a report exceedingly critical of a state-chartered finance company, the Washington Department of Banking found that Household International was deceiving borrowers and repeatedly charging more than seven bogus discount points. In another instance involving a state non-depository lender, First Alliance Mortgage Company charged borrowers percent in fees, financing the fees directly into the loan amount, and enticed borrowers by representing that the loan had “no out-of-pocket costs.”
Following up on DIDA in 1982, Congress passed the Alternative Mortgage Transaction Parity Act (AMTPA) to give non-federally chartered “state housing creditors” parity with federally chartered institutions with regard to “alternative” mortgage transactions (12 U.S.C. 3801). More specifically, Congress identified that state housing creditors, including non-depository finance companies in particular, were having difficulty originating fixed-rate, fixed-term loans in a high-interest-rate environment, and could not compete with federally chartered institutions that were already authorized by their regulators to offer alternative products, such as adjustable-rate mortgages, to help minimize monthly payments.
The first enabling AMTPA regulations permitted state housing creditors to follow federal regulations applicable to federal thrifts regarding negative amortization and balloon payments rather than state law on these points. While prepayment penalties were not initially pre-empted by federal regulators for state housing creditors, the federal Office of Thrift Supervision (OTS) in 1996 identified late fees and prepayment penalties as terms that state housing creditors could also consider to be governed by federal law.
The 1996 policy change presented a particularly vexing problem for vulnerable home loan borrowers. Prepayment penalties have been decried as among the least transparent and most widely abused charges associated with subprime home loans. The damage done by prepayment penalties in subprime home loans is threefold: they strip home equity, trap borrowers in bad loans with an increased risk of foreclosure, and facilitate kickbacks that encourage brokers to place borrowers in loans with higher interest rates than loans for which the borrowers qualify (by ensuring lenders can recoup the kickback should the loan prepay). Prepayment penalties with a lockout period of three to five years, which stipulate that a borrower must pay “six months’ interest” on up to 80 percent of the original loan amount if he prepays his subprime home loan, are common. On a 12 percent interest, $125,000 principal balance, 30-year home loan, such a penalty can approach $6,000, a substantial amount for families trying to build wealth.
In fact, many borrowers find themselves trapped in unattractive subprime home loans by prepayment penalties. While only 2 percent of borrowers in the competitive prime home loan sector choose mortgages with prepayment penalties, over 80 percent of borrowers in the subprime market receive loans with a penalty. Borrower choice is unable to explain such a disparity, since rational borrowers in the subprime market, who may improve their credit scores and refinance into more attractive rates, should presumably prefer prepayment penalties less often than borrowers in the prime market.
Moreover, lenders who claim to be providing a reasonable benefit to borrowers in the form of decreased monthly costs in exchange for the acceptance of a prepayment penalty have been shown to provide considerably less than equitable exchanges. For example, one finance company affiliate of a national bank reported that it provided a reduction of 0.50 percent in interest for borrowers who chose a prepayment penalty. Yet, a borrower who has to pay a six months’ interest prepayment penalty to refinance at year three of a 12 percent interest, 30-year home loan—roughly the average life of subprime home loans for many originators—will have received a benefit worth less than 2 percent of the loan amount, but may be liable for a penalty of almost 5 percent of the loan amount. In other words, for the majority of borrowers facing this prospect, such a prepayment penalty-interest rate exchange will be a losing proposition.
Subsequently, in 2002, the OTS reversed its 1996 policy change as it applied to finance companies, recognizing abuses associated with prepayment penalties and concluding that prepayment penalties were not relevant to Congress’ intent to authorize alternative mortgage products. Reverting to earlier AMTPA regulations, the OTS fully restored the right of states to regulate prepayment penalties and late fees for non-depository entities. The OTS’s 2002 action represented a boon to consumers. While some 35 states regulated prepayment penalties on home loans as of early 2003, the OTS rules from 1996 to 2002 rendered those rules moot for state housing creditors.
Still, even after this significant change, federal law provides that state housing creditors can ignore state consumer protections with regard to negative amortization and balloon payments. While this authority provides substantial flexibility that is used positively in the competitive prime market to reduce monthly payments required under a loan, it can easily be abused by lenders trying to hide a loan’s true costs.
National banks, federal credit unions, federal thrifts, and state-chartered depository institutions enjoy varying degrees of preemption of state usury laws under a legal framework known as the “most-favored lender” doctrine. Under this doctrine, federally chartered institutions “located” in one state (e.g., South Dakota) can “export” the maximum permissible interest rate of that state to loans the bank makes to borrowers in another state (e.g., North Carolina), thus preempting state usury law. State-chartered institutions enjoy a similar right through the Federal Deposit Insurance Act, which allows state-chartered, federally insured depositories to charge the higher of the interest rate allowed by the laws of the state where the bank is located and where the loan is made (12 U.S.C. 1831d(a)). In cases where the lender seeks to use the second state’s laws, it is permitted to choose the highest rate authorized by state law even if such charges are authorized only for a specific set of lenders to which it does not belong.
If you are facing foreclosure, meet an experienced Midvale Utah foreclosure lawyer today. The lawyer will review your papers and advise you of your options.
Midvale Utah Foreclosure Attorney Free Consultation
When you need legal help with a foreclosure in Midvale Utah, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
Ascent Law LLC St. George Utah Office
Ascent Law LLC Ogden Utah Office
|• Total||5.91 sq mi (15.32 km2)|
|• Land||5.91 sq mi (15.32 km2)|
|• Water||0.00 sq mi (0.00 km2)|
|Elevation||4,383 ft (1,336 m)|
| • Estimate
|• Density||5,770.04/sq mi (2,227.74/km2)|
|Time zone||UTC−7 (Mountain (MST))|
|• Summer (DST)||UTC−6 (MDT)|
|Area code(s)||385, 801|
|GNIS feature ID||1430307|
Midvale is a city in Salt Lake County, Utah, United States. It is part of the Salt Lake City, Utah Metropolitan Statistical Area. Midvale’s population was 34,124 according to 2019 estimates from the U.S. Census Bureau.
Midvale is home to the Shops at Fort Union, located on the East side of the city and the Bingham Junction economic center, located on the west side of the city. Midvale is centrally located in the most populous county in Utah, with the direct interchange between I-15 and I-215 located in the middle of the city. Midvale is one of the few cities in Utah to be home to two direct TRAX lines.
About Midvale, Utah
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Utah Center for Neighborhood Stabilization (UCNS), Midvale's Main Street, Union Park, Midvale Jordan River Parkway, Bingham Junction Park, Midvale City Park, Men's Tribal House, Homewood Suites by Hilton Salt Lake City-Midvale/Sandy, The Road Home - Midvale Family Center, Unified Police Department - Midvale Precinct, Midvale City Government, La Quinta Inn by Wyndham Salt Lake City Midvale, InTown Suites Extended Stay Salt Lake City UT - Midvale, Copperview Skatepark, Madison Court, Brighton Place, WashBox Laundromat, Union Park Playground, Creekside Park, Parc View Apartments & Townhomes
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Reviews for Ascent Law LLC Midvale, Utah
We've gotten divorce and child custody work from Ascent Law since the beginning because of my ex. We love this divorce firm! Staff is gentle, friendly and skilled. Tanya knows her stuff. Nicole is good and Ryan is fun. Really, all the staff here are careful, kind and flexible. They always answer all my questions, explain what they're doing and provide great legal services. I personally think they are the best for divorce in Utah.
I have had an excellent experience with Ascent Law, Michael Reed is an absolutely incredible attorney. He is 100% honest and straight forward through the entire legal process of things, he also has a wonderful approach to helping better understand certain agreements, rights, and legal standing of matters, to where it was easy to know whats going on the entire process. I appreciate the competency, genuine effort put forth, and assistance I received from Ascent and attorney Michael Reed, and I will be calling these guys if ever I have the need again for their legal assistance! 5star review Wonderful attorneys!
This review is well deserved for Ryan and Josh. New clients should know they are worth the 5 star rating we give them. We needed 2 sessions from them because of the complexity of the matter, but they are both very passionate about his helping others in need. My sister needed bankruptcy and I needed divorce. Sometimes they go hand in hand but a large shout out to this team - also Nicole is one of the sweetest people you ever did meet - she offered me warm cookies!
Mike Anderson and his colleagues & staff are knowledgeable, attentive and caring. In a difficult and complex case that eventually went to trial, Mike was the voice of reason and the confidence I needed. His courtroom abilities are amazing and I felt his defense of me was incredible. His quick thinking and expertise allowed for a positive result when I felt the World was crumbling. His compassion, after the case, has helped me return to a good life. I trust Mike and his staff. They are friendly and very good at what they do.
I worked with Attorney Alex and Paralegal Ami in my divorce case. I got to know the team very well over the course of two years. I cannot think of a better team to have worked with. Ami and Alex are not only exceptional law professions who are very knowledgeable and thorough, they are also the best human beings who empathize with the emotions I was experiencing. Alex was conscious of my budget and worked efficiently to try to reduce unnecessary legal expenses. My case also involved some dealings with a foreign country that Alex and his team had previously dealt with. They did an amazing job addressing cultural barriers in a very respectful manner and did not fall short in quality of work or in standards when dealing with some of these new challenges. Ami deserves a medal for being extremely professional, calming, and compassionate when it is needed most. When you need family law attorneys, call this firm. I now feel I can move forward with grace and dignity.