Can you sue a hard money lender for fraud?
What is a Hard Money Lender?
In most circumstances, a hard money lender is an institution that gives loans by securing a borrower’s real estate. They usually charge a much higher interest rate than banks. However, they typically grant loans to borrowers when they can’t obtain a loan from a bank.
Predatory lending is when a lender will take action to hinder an individual from repaying his or her debt. In many circumstances, it takes place when borrowers are unaware of the terms of the loan.
In many cases, predatory lenders will try this on those who are not educated, older individuals, and minorities. They also target those who are in need of cash for emergency situations, which may include paying bills. Those with credit problems (who are not able to obtain a loan from a trusted lender) can also be prey to fraudulent practices from lenders.
Predatory lending practices are on the rise when it comes to home mortgages. This is because a home loan uses the borrower’s actual property. As a result, these lenders can profit from the sale of a foreclosed home in the event a homeowner defaults on his or her mortgage payments. Aside from home loans, hard money lenders can also take advantage from those who take out a payday loan, an anticipated tax loan, or an automobile loan.
As a result of hard money lenders negligent practices, the government and homeowners are filing lawsuits against these institutions. There are some banks that are being taken to court as well. In many instances, when an individual seeks help from an attorney, they win the lawsuit.
Can I File a Lawsuit Against a Hard Money Lender?
Hard money lenders can be taken to court under certain circumstances. For example, hard money lenders will need to have the correct license and certification to lend funds. When property is used as collateral, hard money lenders will need to have a special license to use residential property as collateral. In these circumstances, if a hard money lender doesn’t have the proper license, the contract isn’t legally valid.
There are some hard money lenders that are taken to court because of fraud or misrepresentation. If a legal dispute arises between a borrower and a hard money lender, the situation will more than likely have to be resolved in court. There are some instances when damages may be awarded to help the individual receive compensation for his or her loses. In addition, criminal charges can arise if deception or fraud is involved. This may include instances when a hard money lender charges interest rates that are unreasonably high and considered unethical.
Should an Individual Seek Help From an Attorney?
In many cases, hard money lenders can help an individual obtain funds in a quick manner with little verification. However, it is vital to keep in mind that there are significant risks involved with hard money loans. If an individual needs help with a hard money loan dispute and hires an attorney, the attorney can help them decide which course of action is best. In addition, an attorney can also help with the process of filing a lawsuit in court when one is necessary.