Toolkit for Lawyers

TOOLKIT FOR EVALUATION OF

POTENTIAL LAWSUITS

AGAINST PREDATORY LENDERS

Prepared by:

Southeast Tennessee Legal Services

29 Patten Parkway

Chattanooga, TN37402

Telephone: 423-756-0128

Fax: 423-756-0181

E-Mail:

Web Site:

TABLE OF CONTENTS

BACKGROUND QUESTIONNAIRE FOR CLIENT

FINANCIAL STATEMENT BY CLIENT

LOAN QUESTIONNAIRE

QUESTIONNNAIRE ABOUT DEBT COLLECTORS

STATUTES OF LIMITATION

ARBITRATION CLAUSES

CHECKLIST OF GROUNDS FOR LIABILITY

CHECKLIST FOR REVIEWING MORTGAGE LOAN DOCUMENTS

CHECKLIST OF PUBLIC RECORDS TO REVIEW

AUTHORIZATION FOR RELEASE OF INFORMATION

Please see the separate spreadsheets for use in evaluating cases. They pertain to:

LIABILITY – for use in establishing theories of liability and estimating the probability of success in proving liability

DAMAGES – for use in estimating both damages and expenses of litigation

AMORTIZATION – for use when miscalculations are suspected

PAYMENT HISTORY – for use when a client and the mortgage holder differ about the amount that is due

RATES OF RETURN -- for use in comparing conventional and subprime loans

Both this memorandum and the spreadsheets may be downloaded from our website.

We acknowledge the invaluable assistance we obtained from

Elizabeth Renuart, prin. ed., Stop Predatory Lending: A Guide for Legal Advocates, Boston: National Consumer Law Center, Inc., 2002, as well as the Consumer Credit and Sales Legal Practice Series of the NationalConsumerLawCenter. In asserting a claim under copyright law,

we intend only to prevent others from using these materials for profit without our consent and, with respect to its intellectual property, the consent of the NationalConsumerLawCenter.

BACKGROUND QUESTIONNAIRE FOR CLIENT

(IN RESPONDING, PLEASE PRINT)

State your full name.

Indicate your marital status.

If you have been married, include the full name of your spouse (including family name) in each marriage, the number of marriages, and the number and ages of your children.

Indicate any periods of military service, including the dates, branch, rank or rate, serial number, and type of discharge.

List each high school and college you attended, including the dates of attendance.

Give the particulars of your job history. Include the names and locations of your employers, as well as the relevant dates.

List all organizations, clubs, and groups of which you are a member.

Indicate whether you have ever been arrested. If so, please give details. Please do not include traffic violations for which a fine of $100 or less was imposed.

State whether you have ever been sued. If so, please give details.

State whether you are currently under investigation by a law enforcement organization. If so, please give details.

List any honors or awards that you have received.

Describe your present state of health.

Indicate whether you have ever been treated for any emotional or mental illness. If so, please give details.

Indicate to what extent you use alcohol or drugs.

Provide below the names, addresses and telephone numbers of three people who can describe your reputation.

Date:______

Signature

FINANCIAL STATEMENT BY CLIENT

PART A. BACKGROUND

My full name is ______

2. My Social Security Number is ______(I certify I do not have or use a different number.)

I last worked outside the home on or about ______.

I have worked outside the home approximately ______years.

PART B. INCOME

For the last calendar year, my income shown on my federal income tax return was $______(gross income) and $______(adjusted gross income).

For the year before last calendar year, my income shown on my federal income tax return was $______(gross income) and $______(adjusted gross income).

PART C. REGULAR MONTHLY EXPENSES

a. Rent/mortgage, including taxes and insurance$______

b. Utilities$______

c. Automobile$______

d. Insurance (life and other, excluding auto) $______

e. Credit cards$______

f. Personal loans $______

g. Other$______

h. SUB-TOTAL REGULAR MONTHLY EXPENSES $______

PART D. OTHER MONTHLY EXPENSES

a. Food$______

b. Clothing$______

c. Medical, dental, drugs $______

d. Laundry and cleaning$______

e. Recreation$______

f. School expense$______

g. Babysitting/child care$______

h. Beauty/barbershop$______

i. Other:______$______

j. SUB-TOTAL OF OTHER MONTHLY EXPENSES$______

TOTAL OF ALL MONTHLY EXPENSES $______

PART E. ASSETS

ItemDate Acquired Purchase PriceEncumbranceFair Market Value

PART F. LIABILITIES

Item Date Incurred Total Amount OwedAmount of Monthly Payment

Date:______

Signature

LOAN QUESTIONNAIRE

Name:______Date: ______

Solicitation of the Loan Application

What are the name and address of the mortgage company that originally helped you get the loan? ______
Do you know whether it s it licensed? □ Yes □ No
Do you know whether the mortgage company is under investigation or being sued?

□ Yes □ No By whom:______

Do you know others who have borrowed money from this mortgage company and, if so, what are their names, addresses and telephone numbers? □ Yes □ No

______

How did you learn about the mortgage company?  Telemarketing  Mail  Door-to-Door  Radio or Television  Word of Mouth  Broker
Did you have or did you develop a close and personal relationship with the mortgage company? □ Yes □ No
Did the mortgage company explain satisfactorily what its role would be?

□ Yes □ No

Did the mortgage company satisfactorily explain what its charges would be?

□ Yes □ No

What were you told were the benefits to you of refinancing? ______
What did the mortgage company say about your ability to repay the mortgage loan? ______
Was it realistic to believe then that you could repay the loan? □ Yes □ No
Were there any high-pressure sales tactics? □ Yes □ No
If so, what were the tactics? ______
What was the interest rate the mortgage company estimated you would pay? ______
What was the estimated monthly payment? ______
Were you told that the monthly payment would include the cost of the homeowner’s insurance and real estate taxes? □ Yes □ No
What was the estimated dollar amount of the closing costs? (Alternatively, what was their estimated percentage of the loan?) ______
Were you promised that you would receive cash from the refinancing at the closing?

□ Yes □ No

If so, how much? ______
Did you say that you might hire an attorney for the closing? □ Yes □ No
If so, what were you told when you said you might hire an attorney for the closing? ______

Loan Application

Who applied for the loan? ______
Did you read and sign the loan application? □ Yes □ No
Did you receive a copy of the loan application? □ Yes □ No
Now that you have read it, are there any mistakes in it? □ Yes □ No
If so, what are the mistakes? ______
Were you granted a loan in a higher amount than you requested, and you never received a denial of the lower amount? □ Yes □ No
Are you in a class which you believe is protected from discrimination under federal or state law and, if so, which one? □ Yes □ No Class:______

After the Loan Application and Before the Loan Closing

Did you receive, within three business days after the loan application, a “Special Information Booklet” prepared by the Department of Housing and Urban Development? □ Yes □ No
Did you receive, within three business days after the loan application, a “Good Faith Estimate” of the amount or range of settlement charges? □ Yes □ No
Did you receive the following disclosure not less than three business days prior to the closing of the loan: □ Yes □ No

You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application. If you obtain this loan, the lender will have a mortgage on your home. You could lose your home, and any money you have put into it, if you do not meet your obligations under the loan.

Were you provided with any other written statements prior to the loan closing?

□ Yes □ No

If so, what were they? ______

At the Loan Closing

Are the dates on the loan documents accurate? □ Yes □ No
Who was present at the loan closing? ______
Where did the loan closing take place? ______
Were any of the signatures on the loan documents forged? □ Yes □ No
When you attempted to read the documents you were signing, were you encouraged or instructed not to do so? □ Yes □ No
If you were promised cash at the closing, did you receive any? □ Yes □ No
If so, was it the amount of cash you were promised?□ Yes □ No
Were any creditors paid off at the closing without your permission? □ Yes □ No
Were any loan proceeds not paid to your creditors as they were supposed to be?

□ Yes □ No

Did anyone receive cash at the closing without your permission? □ Yes □ No
Was the interest rate what you were told it would be? □ Yes □ No
Was the monthly payment what you were told it would be? □ Yes □ No
Were you told orally that you had the right to cancel? □ Yes □ No
Was there an attorney present at the closing? □ Yes □ No
What did the closing agent say the closing costs were for? ______
Were you told that the closing costs were reasonable and necessary? □ Yes □ No
What payments did the mortgage broker receive at the closing? {See the settlement statement.) ______
Were the services actually performed so as to earn these payments? □ Yes □ No
Are the charges reasonable and necessary? □ Yes □ No
Was the notary public present when you signed the documents? □ Yes □ No
Were you told that you didn’t have to pay your pre-existing mortgage any more?

□ Yes □ No

After the Closing

Was your pre-existing mortgage paid off? □ Yes □ No
Were other creditors actually paid as the settlement statement indicates? □ Yes □ No
Were you required to buy a new homeowner’s insurance policy? □ Yes □ No
If so, how much did it cost each month versus your existing insurance policy? ______
When you fell behind in payments, were you told to stop transmitting payments unless they were for the full amount owed? □ Yes □ No
When you fell behind in monthly mortgage payments, did the mortgage company refinance the mortgage and add on more fees? □ Yes □ No
Have your payments been credited properly? □ Yes □ No
Have you been assessed late or other charges that you believe are improper? □ Yes □ No
Has the escrow account been properly handled? □ Yes □ No
Has your loan been assigned to a different lender and, if so, who? □ Yes □ No

Name(s) and address(es): ______.

Were you told in writing that your loan would be assigned? □ Yes □ No

The Terms of the Loan

(We Will Complete this Part if You Don’t)

Date of loan ______
Original amount $ ______
Interest rate ______%
Total amount of closing costs: $ ______.
Amount that was paid directly or indirectly to the lender: $______.
Must you go to arbitration if there is a dispute? □ Yes □ No
Were the disclosures given under the Truth in Lending Act? □ Yes □ No
As far as you know, does this loan qualify for protection under the Home Ownership Equity Protection Act? □ Yes □ No
Is there a balloon payment? □ Yes □ No
Does the interest rate increase if default occurs? □ Yes □ No
Is there a penalty if the loan is prepaid? □ Yes □ No
Were the disclosures given under the Home Ownership Equity Protection Act?

□ Yes □ No

Documentation

Do you have complete original loan papers?□ Yes □ No
Name of current lender or servicer ______
Address of current lender or servicer ______
Total monthly payment $______
Total monthly income $______
Months behind ______

Foreclosure Status

Latest date of letter threatening foreclosure ______
Sale date (if scheduled) ______
Other deadlines pending ______

Evidence Gathering

Do you know of any relationship or connection between the mortgage company and any subsequent owner of your loan? □ Yes □ No
If so, what is the relationship or connection? ______
Is there reason to believe that the bad acts of the mortgage company were known to the company that purchased your loan from it? □ Yes □ No
Is there a relationship or connection between any of the other individuals or companies that we might sue? □ Yes □ No
If so, what is the relationship or connection? ______

92. Is there any evidence you have that we haven’t asked for above? □ Yes □ No

QUESTIONNNAIRE ABOUT DEBT COLLECTORS

Attempts to Locate You
Did a representative of the debt collector communicate with any person – such as your employer -- for the purpose of locating you?

 Yes No With whom and when?______

In seeking to locate you, did the representative of the debt collector identify the debt collector for whom he or she was working?

 Yes No

In seeking to locate you, did the representative of the debt collector state that you owed a debt?

 Yes No

In seeking to locate you, did the representative of the debt collector communicate with any such person more than once?

 Yes No If so, how many times?______

In seeking to locate you, did the debt collector communicate by post card?

 Yes No If so, when?______

Communication with You or Others by the Debt Collector

Did the debt collector communicate with youat any unusual time or place or a time or place it should have known was inconvenient to you?

 Yes No If so, when?______

Did the debt collector communicate with youafter it knew you were represented by an attorney with respect to the debt?

 Yes No If so, when?______

In seeking to locate you after it learned that an attorney represented you, did the debt collector communicate with any person other than your attorney?

 Yes No If so, when?______

Did the debt collector communicate with youat your place of employment although it had reason to know that your employer prohibited you from receiving that type of communication?

 Yes No If so, when?______

Did the debt collector communicate with any person -- such as your friend or your fellow employee – about the debt?
 Yes No If so, to whom and when?______

Did you notify the debt collector in writing that you refused to pay the debt or that you wished the debt collector to cease further communication you?

 Yes No If so, when?______

Did the debt collector nevertheless communicate further with you regarding the debt?

 Yes No If so, what did it say and when?______

If the debt collector contacted you after it or the lender had been notified in writing that you wished it to cease further communication with you, what did you say to the debt collector and when? ______

Harassment or Abuse
Did the debt collector cause a telephone to ring or engage in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number?

 Yes  No If so, when and how?______

Did the debt collector place telephone calls without meaningful disclosure of the caller's identity?

 Yes  No If so, when and how?______

Did the debt collector use obscenity or profanity?

 Yes No If so, what was said?______

Did the debt collector use racial, ethnic, or other slurs?

 Yes No If so, what was said?______

Did the debt collector use other language that would abuse the hearer or reader?

 Yes No If so, what was said?______

Did the debt collector engage in name-calling or other derogatory remarks?

 Yes No If so, what was said?______

Were telephone calls to you harassing, abusive, or misleading in a way that is not otherwise described in this questionnaire?

 Yes No If so, how?______

Did the telephone calls cause physical or mental harm to you?

 Yes No If so, what was the damage?______

What was the name of the representative of the debt collector with whom you spoke? ______

Do you believe that the representativeof the debt collector used an alias?

 Yes No Why do you think so? ______

Did the debt collector threaten to call your employer unless the debt was paid?

 Yes No If so, when and how?______

Did the debt collector falsely represent that your unpaid debt would be referred to attorney for immediate legal action?

 Yes No If so, when and how?______

Did the debt collector do more than warn of embarrassment, inconvenience, and expense that might be caused by a lawsuit?

 Yes  No If so, when and how?______

Did the debt collector do more than warn that a lawsuit might be filed if the debt was not paid?

 Yes  No If so, when and how?______

Did the debt collector send a letter to you in the name of a person not employed by it?

 Yes No If so, when and how?______

Did the debt collector send a letter to you using yellow paper and phrases and typeface indicating falsely that it was a telegram?

 Yes No If so, when and how?______

Did the debt collector specifically say in its letters that they were attempts to collect the debt and that any information obtained as result of them would be used for that purpose?

 Yes No If not, which letters?______

Did the debt collector falsely represent itself as a credit-reporting agency?

 Yes No If so, when and how?______

Did the debt collector use or threaten the use of violence or other criminal means to harm the body, reputation, or property of any person?

 Yes  No If so, when and how?______

Did the debt collector publish a list of people who allegedly refuse to pay debts?

 Yes  No If so, when and how?______

Did the debt collector advertise the sale of your debt in order to coerce your payment?

 Yes  No If so, when and how?______

Unfair Practices

Did the debt collector accept from you a check or money order that was postdated by more than five days?

 Yes No

If it did accept a postdated check or money order from you, did the debt collector notify you in writing of its intent to deposit the check or money order?

 Yes No

If so, did it say that it would deposit the check not less than three and not more than ten business days prior to the date it actually made the deposit?

 Yes No

Did the debt collector threaten or institute criminal prosecution concerning your postdated check or money order?

 Yes No

Did the debt collector deposit -- or threaten to deposit -- your postdated check or money order prior to the date on it?