October 1st, 2008 by Reed Allmand 
Many homeowners don’t realize it, but often their loan agreements include binding mandatory arbitration clauses. These clauses require that any dispute a homeowner may have with a lender be settled through arbitration and prevents the homeowner from taking any claims to court.
What This Means For You
If you’re a homeowner who has been the victim of predatory lending practices often found in the subprime lending industry, binding mandatory arbitration clauses prevent you from having your case heard by a jury of your peers, in a public forum. Arbitration is held in secret with little or no documentation of the proceedings.
Often, binding mandatory arbitration clauses include language that limits a homeowner’s ability to claim penalties, attorney fees and may limit the actual dollar amount awarded homeowners.
Some binding mandatory arbitration clauses also prevent homeowners from joining a class action suit against lenders.
If you are considering taking out a loan on a home make sure that your attorney checks the documents for binding mandatory arbitration clauses and their stipulations.
(source: http://www.responsiblelending.org/issues/arbitration/briefs/page.jsp?itemID=28012328)
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
View all posts by Reed AllmandSubscribe
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