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Hidden, Illegal Fees Charged by Lenders Who Are Refinancing Home Loans

While lenders are touting the benefit of skipping a mortgage payment, these offers are often not being made to help you, but to take advantage of you.
By Rogge Dunn |
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Over the last three years, historically low-interest rates caused many people to refinance their home mortgages.  Lenders providing re-financing often give homeowners the option of skipping one or more monthly payments as part of the home re-finance.

If you refinanced your home mortgage and the lender offered you the option to skip a payment or two during the refinance process, you may have been scammed.  Was the ability to skip a payment pitched to you as a benefit to you so that “you could avoid making a mortgage payment for two months”? 

While lenders are touting the benefit of skipping a mortgage payment to veterans and other homeowners, these offers are often not being made to help you, but to take advantage of you. 

Attorneys specializing in consumer lending and home loan disputes have identified an unscrupulous scheme to put money in their pockets at the expense of veterans and other homeowners.

What many lenders are not telling homeowners is that by skipping a payment or two, the homeowners are adding interest onto the amount of their loan to the lenders’ benefit and possibly extending the length of the loan.  By skipping a payment, the lender is not letting the borrower avoid these payments permanently.  You still have to make the payments they are letting you skip by either paying them all–plus interest–at the end of the refinance process or at the end of the loan.  If the lender does not fully disclose all the financial ramifications of skipping payments, they have likely violated Texas and federal law.

My father and other family members are proud veterans.  I take particular interest in situations where companies take advantage of veterans. 

When adding up the number of veterans and consumers who have been deceived by this skip a payment scheme, consumer lending, and home loan attorneys have noticed that the lender makes millions of dollars off of this scheme. 

Fortunately, borrowers victimized by this “skip a payment” scheme are not without legal remedy.  The State of Texas and the United States Government have enacted laws to penalize lenders for implementing these kinds of schemes, including Texas’ Deceptive Trade Practices Act and the United States’ Truth in Lending Act.  We have been investigating this scheme and have identified at least one lender, Cardinal Financial Company, that is trying to mislead homeowners into refinancing their home loans.

If you have information about lenders’ misrepresenting re-finance terms or want to understand your rights, contact an attorney with consumer loan and home re-financing expertise, Rogge Dunn at the Rogge Dunn Group, PC in Dallas, 214-888-5000 or [email protected] or Scott E. Gizer at Early Sullivan Wright Gizer & McRae LLP, in Los Angeles, (323)310-4675 or [email protected].

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