Bankruptcy

Home owners are protected from deceptive banks

By Attorney Goldstein

The Massachusetts Consumer Protection Act is a law which allows consumers to take legal action against unfair or deceptive business activity. M.G.L c. 93A is the Massachusetts statute which is used in order to deal with such matters. Violation of the regulation gives the individual litigant an opportunity to obtain actual damages and equitable relief, the Attorney General may obtain injunctive relief, and a civil penalty may be imposed. United Cos. Lending Corp. v. Sargeant, 20 F. Supp. 2d 192, 204 (D. Mass. 1998)

In relation to banks and their lending practices to prospective homebuyers or consumers the Massachusetts Consumer Protection Act is a useful tool in order to protect those subject to the unfair and fraudulent practices used by banks and lender services. One way courts determine whether a bank or lender has violated this particular statute is if the conduct was done so with the intent to deceive or fraudulently induce a purchase.

With respect to banks offering loans to homeowners, sub-prime loans tend to be the most common loans involved within consumer protection cases. Sub-prime loans are defined as ??loans offered by banks to borrowers who generally would not qualify for traditional loans offered at the generally prevailing rate of interest for conventional mortgages? Commonwealth v. Freemont 452 Mass. 733, 734 (Mass. 2008).

There are times were banks and lending institutions will use various tactics in order to avoid their duties or responsibilities which the court has deemed unfair and deceptive according to the Massachusetts Consumer Protection Act. For example, in one case,the lender breached their agreement when they made the borrower believe certain procedures needed to be followed in order to obtain loans but the lender never followed through with these procedures. The court found this behavior to be unfair and a violation of the Consumer Protection Act. Zuker v. GE Capital Corp., 20 F. Supp. 2d 254, 263 (D. Mass. 1998).  In another example,extremely high brokerage fees were charged to the borrower. The court ruled that charging such high fees was unfair and deceptive according to the Consumer Protection Act because the lender substantially deviated from industry-wide practice United Cos. Lending corp. v. Sargeanty, 20 F. Supp. 2d 192, 209 (D. Mass. 1998).

For those who may find themselves subjected to the tactics and unfair behavior of banks and lending institutions be mindful that the Massachusetts Consumer Protection Act will prevent those banks and lending institutions from allowing their acts to go unpunished.

Full post as published by Bankruptcy Articles & Blog on April 08, 2010 (boomark / email).