NEW CASE ALERT: Our Firm Files Lawsuit Against Local Predatory Lender, Charging 50% Interest and Attempting to Evict Local Family
On Monday, a new client came into my office with an unbelievable story. My client had some financial difficulties and was in pre-foreclosure with his second mortgage holder. Looking for some unconventional solutions, he was introduced to a local “hard money” private lender who offered a workout loan to stop the foreclosure. This lender sold him on a $50,000 loan, with 50% interest rate with a 6 month balloon payment.
Under the Massachusetts criminal usury law, however, a lender cannot charge more than 20% interest without first registering with the Attorney General’s Office. This private lender was not registered. That was the first red flag. The next red flag was that in addition to a standard mortgage, the private lender demanded that my client (and his wife) take the highly unusual step of signing over a “reverter deed” to their house, as additional security. Under duress, my clients signed the deed.
Only days later, the private lender recorded the deed, thereby becoming the record owner of the clients’ home, then, unbelievably, started eviction proceedings against my client and his family. Mind you, the loan was not even due for payment until March 2020. The lender appeared to have pulled a fast one over the local district court judge, and was able to get an eviction move out order. (My client did not have the means to retain counsel, unfortunately). The loan shark also sent threatening text messages like “TELL YOUR KIDS THEY ARE MOVING OUT!!!”
On the eve of the sheriff’s move out, I filed a multi-count civil action against the private lender, alleging predatory and illegal loan shark activities and unfair debt collection practices. I was able to get a temporary restraining order to stop the eviction, as well as a lis pendens (notice of claim), in order to rescind the loan and the deed.
This family of four can now sleep knowing they won’t be thrown on the street. And my father has come up with a new nickname for me….Robin Hood Vetstein. I’ll take it! I will keep you posted on developments. Hopefully, the Attorney General’s Office will take interest in this lender. If this story sounds familiar, please contact me…I do not want to divulge the lender’s name here on this platform, but I would be happy to provide it to you privately.
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