“Bad faith” can occur at almost every step of the home-buying process, from the initial valuation of the house you wish to purchase to the closing of the loan to buy that house. Sellers, brokers, and lenders may all try to take advantage of an unwary buyer, and the results can be disastrous for the buyer.
When a valuation is placed on a house for sale, it should reflect an honest assessment of its value and its value within its neighborhood. An inflated home value will result in a mortgage for more than the house is worth. The broker or lender does not care if the value is inflated, because they make money from your mortgage. If they enter into a mortgage with you knowing the value is inflated, you may have a claim for bad faith.
If the broker or lender tells you to fill out a mortgage application with information that they know is false, such as saying you earn more money than you do, or that you have been working for a longer period than you have, it should tell you that they are acting in bad faith, attempting to get you a mortgage to which you are not entitled and which you may not be able to repay.
When a broker or lender changes terms at or right before closing, and you are suddenly faced with new costs, additional fees, and different terms for repayment, you may have been the victim of bad faith lending. If you do not understand these terms, and the broker or lender knows that you don’t understand these terms, you will most likely be reassured that the changes “don’t really mean anything”.
They certainly will mean something – and what it means is a higher payment for you. The outcome of bad faith in the lending process? You pay more than you agreed to and / or can afford.
St. Louis mortgages law firm Goldblatt Law has been protecting the rights of homeowners for nearly 30 years. Call us at 314-288-8455, or complete the quick contact web form for a free initial consultation.