Can someone sue a bank for giving a mortgage that the person cant afford?

Question

My mother was given a mortgage witch is almost the same amount of her income is per year.Leaving her with a few thousand dollars a year to live on after she pays her mortgage payments.Can she sue the bank? I thought I've seen an article in yahoo news about this happening recently.

Answer 1

How did this situation happen? Did your mother have a sudden loss of income? Anyone who wants a mortgage has to declare their income, and in most cases document their income. All lenders require this, because they usually don't hold the mortgages, they sell them to investors, and the investors want the information so they will know their investment is sound.

This sounds like a bad situation, but I don't think suing will work for you, and wouldn't advise going into foreclosure unless there is absolutely no other choice.

The first thing I would try would be calling the bank and trying to work with them. Most reputable banks and mortgage companies will work with you if you're having trouble meeting the payments - they want your money, not your home. If there isn't a pre-payment penalty on the mortgage you might be able to refinance to a lower payment - with the current mortgage company or another reputable one.

In spite of all the news surrounding the mortgage business lately, if your mom has decent credit she should be able to get a good fixed rate mortgage, and hopefully she could get a payment that fits her budget better. If you want to research payments, try going to Quickenloans.com and using their mortgage calculators. That will give you an idea of what's available to you.

I hope this helps.

Answer 2

Unless your mother gave the lender incorrect information and they made the loan in good faith that she could afford it, this sounds like predatory lending. One sign of predatory loan practices is talking a borrower into payments that they cannot afford. The website below may give you some additional insight and resources.

I don't know what your options are, but at a minimum this bank should be reported to the Office of the Comptroller of the Currency (OCC) in your state. Lenders are supposed to require proof of income and the payment amount should not exceed a percentage of that income (25-40%).

I would pursue this - contact an attorney or legal aid, call the company's main office, whatever. Good luck.

Answer 3

Anyone can sue , the question is "can you win ?" .
Adults are expected to be responsible for their financial decisions and unless you can demonstrate that she was feeble and a victim of a predatory lender , it will be tough .
And the attorney will cost you thousands .

If she can't afford it , time to bail , like all the other foreclosures and get into a rental she can afford .

>

Answer 4

no person compelled the banks to offer out loans. If that grow to be the case then each and every financial corporation interior the country could have had issues. Many banks took the prospect of accepting loans they knew have been undesirable because of the fact they could sell them off in finished or products to the loan homes.

Answer 5

Perhaps your mother lives with you and she does not need to pay for food or telephone or television.

Sometimes people move with their families to save money and they rent their house to somebody else.

Also, you can live with a few thousands of dollars a year.

She cannot sue the bank.

Answer 6

I doubt it. If she was foolish enough to sign it, why would they be responsible for it?

While I agree that they were a bit predatory, you can't hold the banks responsible for people making bad decisions. Could you then sue McDonalds for selling a milkshake to a fat guy?

Answer 7

if she provided them with the correct information and nothing changed then she should have been able to afford it.
if she said that she actually made more money than she does, then it is her fault
so no, you cant sue

Answer 8

Most likely not.. If she knew she couldn't afford it, then why did she sign for it?