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Lenders Face Lawsuits From Spanish-Speakers Illegally Provided English-Only Loan Documents

July 31, 2009

As loan modification lawyers in Orange County, we frequently represent clients whose first language is not English, especially Spanish-speakers. In some of these clients' cases, we discover that they were given mortgage loan documents in English, despite conducting the entire rest of the transaction, including loan negotiations, in their native language. This is illegal under California's Foreign Language Contract Act. Furthermore, in many of these cases, switching the language at contract time allows the lender to sneak in contract provisions different from what the parties agreed to, or that were not discussed, in violation of the federal Truth in Lending Act and other consumer protection laws.

Howard Law LLP has already filed several lawsuits on behalf of clients in this situation, as have many of our colleagues. One of our colleagues recently reported a victory in such a case: A judge stopped a foreclosure on a San Diego County homeowner who was a victim of these bait-and-switch tactics. That client alleged that he was given loan documents in English after Spanish-language refinancing negotiations, but also that he was granted an adjustable-rate mortgage with an interest rate above 8% -- not the 5.94% fixed-rate mortgage he agreed to. He was never given a copy of these documents in Spanish. When the interest rate on this loan adjusted upward twice, the buyer could no longer make his payments. After consulting an Escondido predatory lending lawyer, he filed a lawsuit alleging illegal practices by his mortgage lender and won a preliminary injunction stopping the foreclosure.

This may be a nationwide problem. According to a recent article in the Orlando Sentinel, Latinos in Central Florida had an above-average number of the region's subprime and adjustable-rate mortgages. Latinos also had a disproportionate share of the highest interest rates. Those findings are reflected in a recent study by the Pew Hispanic Center showing that Latinos (and African Americans) were more than twice as likely as whites to get higher-priced loans. While the study's summary did not address the role of language, common sense, anecdotal evidence and our experience as Buena Park loan modification lawyers all suggest that when borrowers don't understand English well, lenders have an opportunity to mislead and exploit them using English-only documents -- which is precisely why the Foreign Language Contract Act exists.

Howard Law has an active loan modification practice serving homeowners throughout Southern California. We have a strong record of success helping clients get fair and sustainable loan modifications, in part because of our aggressive protection of our clients' rights. After taking each new case, our Brea loan modification lawyers look through the records for any evidence of predatory lending, which we can use to get the lender's full attention and as a bargaining tool to secure the most favorable possible changes to our clients' loans. In every loan modification case, we work hard to get clients a loan modification that actually lowers their monthly mortgage payment, allowing them to stay in their homes for the long term.

If you're fighting to save your home and you know you need competent, professional help, you should call Howard Law. For a free, confidential consultation, you can call us toll-free anytime at 1-800-872-5925 or contact us through the Internet.