Due to the pattern of
deceptive and unfair trade practices by the
financial institutions in this country, the
Federal Legislature has approved laws designed
to protect the consumers from abuses by these
institutions. One of these legislative
pieces is known as the “Truth in Lending Act”.
This legislation is designed to protect debtors
and consumers by requiring the financial
institutions reveal all the terms of the loan so
that the debtor can effectively compare terms
from various institutions.
Under TILA, the
lender or financial institution has the
obligation to provide the debtor accurate
information before signing the loan agreement.
These disclosures are mandatory and include the
amount of the loan, the number of payments,
pre-payment penalties, if they apply, the
expiration date, late penalties, annual
percentage interest and any service charges.
If the consumer finds violations of TILA, he/she
can recover damages from the financial
institution.
Obviously, TILA
violations could be extremely useful in the
negotiation process insofar as damages caused by
violations of the statute could serve as a credit
against the institution you are negotiating with.
Therefore, any person in need of this type of
service must ensure that he/she has hired an
attorney that is knowledgeable of the multiple
Federal Statutes designed to protect consumers
against the institutional abuses.
Unfortunately, these
statutes are somewhat complicated and require
specialized knowledge, very few consumers have.
This is why I am baffled when I see advertisements
recommending that consumers negotiate their own loan
modification because as very few have the knowledge
to invoke violations of the aforementioned statute.
If you choose to follow these recommendations you
may become a victim of your own lack of knowledge.
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