Bad credit lenders, like all mortgage lenders, are usually on the up and up. However, there are some bad apples who don't honor their disclosures, engage in discriminatory practices, bait and switch their interest rates, or take advantage of less sophisticated borrowers. If you think you've been had, what do you do?

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First, try to resolve the problem with the lender -- try someone higher up than your loan agent, or even someone at a home office in a compliance or audit department. Write a detailed account of what happened and attach any documents that support your claim. For example, if you were told that your interest rate was locked but you were then offered a higher rate at closing, provide your signed rate lock agreement (or notes of your conversation with the loan officer), and your closing documents showing the date and interest rate. See if the lender will honor its prior commitment.

If you get no satisfaction, take it to an agency.

Where to complain depends on what kind of loan you sought and the charter of the lender. You may also try your state Attorney General or financial institutions department.

Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation (FDIC) handles complaints about FDIC-insured state banks which are not members of the Federal Reserve System. You can submit a complaint about your financial institution by completing the FDIC Customer Assistance Online Form.

Comptroller of the Currency

The Office of the Comptroller of the Currency (OCC) is a bureau of the U.S. Department of the Treasury. The OCC handles complaints about National Banks. (Usually banks that have “National” in their name or “N.A.” after their names.) You can submit a complaint by completing the OCC Online Customer Complaint Form.

Office of Thrift SupervisionThe Office of Thrift Supervision handles complaints about Federal savings and loans, and also Federal savings banks. You can submit a complaint about your financial institution by completing the OTS Consumer Complaint Form.

Federal Trade Commission

The Federal Trade Commission handles complaints concerning most non-bank lenders, such as,mortgage and finance companies and state credit unions. You can submit your complaint through the FTC’s Online Complaint Assistant. (Note: The FTC Online Complaint Assistant handles a variety of complaints (including complaints about non-financial companies, business practices, identity theft, and episodes of violence in the media).

The Federal Reserve Board

The Federal Reserve Board handles complaints and regulates state-chartered banks and trusts. The agency also administers Truth-in-Lending, Equal Credit Opportunity Act, and Fair Credit Reporting Act. You can submit your complaint by completing the Federal Reserve Board Online Complaint Form.

National Credit Union Administration

The National Credit Union Administration handles complaints about National Credit Unions. For Federal Credit Union (a credit union with the word “federal” contained in its name or any credit union in Delaware, South Dakota, Wyoming or Washington, DC), NCUA is the regulator. You can file a formal complaint by sending the NCUA a letter – no special form is required – to the NCUA regional office for your state. Find the NCUA regional office for your state here.

Department of Veterans AffairsThe Department of Veterans Affairs handles complaints about loans guaranteed by Veterans Affairs. Contact the VA Regional Loan Center here.

HUD
Complaints about government lenders may be reported here.

Bringing in the Big Guns

You may also choose to take private action against your lender. In addition to filing a complaint with the appropriate agency, you can contact a real estate or trial attorney and sue the lender in your local court.