How to foil a loan shark?

[Bonhomme]

Here's the scoop. I'm selling a house, but the mortgage company has charged usurious interest (about 60% annually -- I am not kidding) on the mortgage. They did that by charging interest on a repair escrow they are holding that I've not fully drawn from. So they were charging me interest on a $53,000 loan when they only had actually lent me about $22,000. I did get some draws, so to this point they've actually lent about $35K. But still way short of the $53K they're charging me for.

Since the loan went past the balloon, now they're charging another 1% per month as an "extension fee" plus 18% of the regular monthly payment as a "late fee."

This company (Rehab Funding, of Bala Cynwyd, PA) purports to be legit, and won't go breaking both my legs (LOL), but they are running a scam on property renovators, no doubt.

Don't tell me I shouldn't have gotten the loan, because it was my only option. I need to know what's best to do now, before the sale closes.

If I recall correctly, the maximum interest they're entitled to charge is 25% annual interest. So how do I go about disputing their payoff figures for the closing of the sale? Can I have it put in an escrow account until the dispute is settled?

I don't want to alarm them, or they'll just try to take the house because it is past their unreasonably short (1 year) balloon, and I may not be able to get the sale done. But they'll lose, too, if they do that, because I know they'll get way less for it than their payoff figure.

I'll ask the title company and call an attorney or two, but I'm wondering if any of you have any ideas.

 

[prosemont]

Contact your state's Commissioner of Banking and the Consumer Protection Division of the Attorney General's Office.

Often, either of those two departments or both have staff designed to represent you (sometimes at very low cost or for free) in cases like this. In addition, most states have large punitive damage statutes designed to protect consumers that give the consumer triple damages -- which in turn gives the defendant lender great impetus to settle with you.

 

[check_mate_kid_uk]

here in england there was a case where a high street bank, 1 of the big ones, aobut 20 years ago gave some one a loan of £5000 or so with 18% intrest on and they could not pay it, it grew to over £300,000 of debt and they went to court over it about a month ago.

well the court decided to whipout the debt, they said it was an 'extorshinate" amount of intrest so the debt was whiped clean.

mortages are ment to be a lot lower intrest then a loan, if this compnay is legit and are charging so much, then take them to court over it. If they are not legit and doing it illegaly then they will wipe the debt out because they do not want to get in to trouble and be found out by the authorities

 

[Snatchmaster]

Contact your local ACORN (Association of Community Organizations for Reform Now) office. They specialize in fair housing issues and often are able to help people escape from predatory loans.

If you can't find them in the phone book. look ACORN up online and find your nearest office there.