Fighting Predatory Lending

One of Attorney General Tom Miller’s top priorities is protecting consumers from predatory lending.

Unfair and misleading home mortgage lending practices can result in devastating financial losses for consumers -- up to loss of their home. Predatory lending can include a variety of unlawful lending practices, such as giving borrowers inaccurate information about interest rates, discount points and other mortgage loan terms; inflating property appraisals; and persuading borrowers to refinance, even when refinancing doesn’t offer any real advantage to the borrowers.

Predatory lending in motor vehicle purchases also can be very costly to consumers. Signs of possible predatory lending in auto financing may include:

• Charging unfairly high interest rates given the consumer’s credit rating;
• Falsely inflating the consumer’s income on a loan application;
• Charging a purchase price two or three times the average market value of a used vehicle;
• Quoting monthly payments that include optional purchases such as credit insurance or service contracts;
• Offering auto title loans with triple-digit interest rates;
• Making up fictitious down payments;
• Writing loan paperwork that differs from oral promises made during the sale;
• Telling consumers “not to worry” about loan terms because they are temporary or because the consumer will soon will be able to trade-up to a newer car.

Iowa Attorney General’s Office: Recent Activity Regarding Mortgage Foreclosures, and Important Information for Consumers

Ameriquest Settlement Information:

Attorney General Tom Miller's Office estimates that about 3,000 to 5,000 Iowa consumers will be eligible for restitution from the $295 million settlement with Ameriquest Mortgage Company. Restitution to Iowans is likely to total about $2 million -- the largest consumer restitution in state history. A web site and toll-free telephone number are now available with detailed information about the settlement, and general information about who may be eligible to receive restitution payments. More Information.

Fighting Predatory Lending Practices in Home Mortgage and Refinancing Loans:

Suing predatory lenders.

Household Finance: Attorney General Tom Miller and his office led the national group of states that obtained the largest national consumer protection settlement ever -- the $484 million settlement with Household Finance.

• “Miller: All Fifty States Join Settlement with Household Finance”
• Household Home Loan Holders in Iowa to Receive $1.49 Million in Refunds

Ameriquest Mortgage Company: Attorney General Miller also led the group of states in obtaining the $295 million settlement with national lender Ameriquest. Restitution to Iowans is likely to total about $2 million -- the largest consumer restitution in state history. For current information go to www.ameriquestmultistatesettlement.com.

• Ameriquest Will Pay Millions and Reform its Lending Practices
• Ameriquest Settlement Web Site and Toll-Free Number Available

Helping consumers who file complaints.

• File a Consumer Fraud Complaint

Educating consumers about how to avoid becoming victims of predatory lending.

Learning the signs of predatory lending can help you avoid becoming a victim.

• U.S. Department of Housing and Urban Development: “Don’t Be a Victim of Loan Fraud.”
• The Federal Reserve Board: “Interest-only Mortgage Payments and Payment-option ARM’s.”

Advocating for better laws against predatory lending.

• Miller Asks Iowa Lawmakers to Tackle Predatory Mortgage Lending.
• Miller Tells Congressional Committee of Predatory Lending Problems and Vows They Will Be A Main Priority Of His Office

Bringing actions to fight other real estate practices that threaten people’s homes.

• State Alleges Consumer Fraud by Wolford Group
• Court Appoints Receiver to Control Wolford Group Assets and Affairs
• Miller Sues John Davis and Christine Frank for alleged consumer fraud and ongoing criminal conduct in the sale of homes.

Fighting Predatory Lending Practices in Financing Vehicle Purchases and Car Title Loans:

Filing lawsuits against dealers who allegedly targeted consumers with impaired credit and getting money back or credit for used car buyers.

• Attorney General Alleges Consumer Fraud by Dan Nelson Automotive Group
• MetaBank Agrees with State to Provide Better Loan Terms to Dan Nelson Automotive Customers
• FSB Financial Agrees to Better Loan Terms for Dan Nelson Customers
• Auto Receivables Trust Agrees to Better Loan Terms for Dan Nelson Customers
• Tidewater Finance Company and Consumer Portfolio Services, Inc., agree to provide better terms for loans they bought from Nelson's finance company.

Working to change Iowa law to reduce outrageously high, triple-digit, interest on auto title loans.

• Miller: Enact "Car-Title Loan" Law. Attorney General warns consumers -- and lawmakers -- about car-title loans: "There is no justification for such astronomical interest rates."