Does This Violate Truth In Lending

[RBecker]

Would the following constitute a violation of the Truth In Lending Act?


Sept. 27, 2001

I would like to bring to someone's attention that a lender may be using bait-and-switch tactics in order to avoid offering rates that coincide with the new low prime designed to stimulate economic recovery in the United States. Consumers need to be warned.

I recently discovered this practice when Irwin Home Equity a.k.a. PremierEquity sent me a “final numbers” e-mail related to my home equity line-of-credit (I applied on July 19 through lendingtree.com) that stated “everything came back the way I ‘originally’ quoted you.” However, when I called the next day, I was informed that they had to change products from the one we had been promised to a different one. The new product interest rate would be 9.75% as opposed to our previously agreed upon rate of 1% over prime.

While the company representative cited that the change in products was related to the fact that our home appraisal came in at 150k, I contested that it could not be a new factor because: it was unlikely this could have had a bearing on the loan within 12 hours; that they had stated a month ago that they had appraised the home at 150k and it was not considered a factor; and that our lender representative had called back to offer me a ‘counter offer’ that included a lower interest rate, but not one that would mirror the original offer. The representative declined to comment. And, after more than one minute of silence, I broke off the conversation by calmly stating it did not appear likely that we could resolve this matter at this time.

You should also know that while I am confident I can secure the loan I am seeking through another lender on my own, I do not want others to fall prey to dishonest lenders when so many people are taking a chance to proceed with their purchases in order to help restore the American economy. If I can provide you any information, please do not hesitate to contact me. My email is [email protected]

Respectfully,
Richard R. Becker

 

[HomeGuru]

I cannot give you an answer because you have not provided all the pertinent facts.

Review the TIL Act and state your issues in your letter to the lender in numerical order as to what transpired and how the action of the lender violated a stated section of the TIL.

 

[RBecker]

Thank You

Thank you,

I will re-review the TILA and HOEPA (Home Ownership an Equity Protection Act) to make future comparisions and make line item violations. As I worked this weekend to prepare a case study for the FRB on this incident, I found out just how difficult of a process this may be (but it will not change my resolve).

While may research has helped to conclude that this is a true 'bait and switch' case study, most materials say there is no recource. In this case, it seems twice as difficult because representatives of the company used the names Irwin Home Equity, Irwin Union Bank and Trust, and Premier Equity interchangeably, sometimes in unison. I beleive this will make it even more difficult for various agencies because it confuses what falls under which juristictions.

In the meantime, I will forward my 11-page brief along to the FRB, FTC and others in the hope others can avoid this practice. And, now you have given me a very good idea to look over the case study and apply it to the various regulations such as the TILA and HOEPA. Thank you again.

Richard Becker

 

[HomeGuru]

Good luck to you.
Keep us posted.