This paper deals with what has commonly been called Mortgage Fraud. It does not deal with all potential types of fraud involving a mortgage company but only a very limited type. Specifically, it will discuss a situation where a home improvement contractor does work to a home and takes a mortgage on the home as payment for the work. As soon as the homeowner signs the mortgage, the contractor assigns the mortgage to a mortgage company. The mortgage company pays the contractor for the work done on the home by purchasing the mortgage. The mortgage company then collects the payments from the homeowner on the mortgage.

Large corporations that control the business and political climate in Alabama spew venom regarding “trial lawyers” and the right to trial by jury. In fact, bashing trial lawyers will be their main platform in the Supreme Court elections this fall. The effect of this rhetoric is to give trial lawyers a bad name with many business people that hear this propaganda. Based on this, most business folks don’t think they could ever need a trial lawyer. To the contrary, in today’s competitive business climate, businesses need a trial lawyer to protect their interest.

Debit insurance fraud cases are numerous in Alabama. Alabama's low income and uneducated population make many citizens sitting ducks for the unscrupulous debit insurance fraud agent. Debit insurance is distinguished from other types of insurance because of the agent's involvement and the smaller value of the policies. The debit insurance agent goes to the policyholder's home once a month and collects a small amount of premium usually in cash for the policies. Typical policies are $5,000 burial insurance policies, small life insurance policies, accidental expense policies, and hospital expense policies. When the policyholder gives the agent money, the agent is trusted to take the money back to the company and credit it to the policyholder's policy. Normally, the agent is required to give the policyholder a receipt showing he has received the money or to put a check-mark in the policyholder's payment book showing that the money has been received.

Alabama has some of the weakest consumer protection laws in the entire country, especially in the area of consumer finance. Most states have a limit on the interest rate that can be charged on consumer loans. In Alabama, on loans over $2,000.00, there is no numerical limit. The only limit is that the interest rate cannot be "unconscionable".

Although no statute or regulation defines the term “predatory lending,” industry observers generally describe this type of behavior to include the theories discussed below. It has been estimated that predatory lending costs consumers nationwide $9.1 billion, annually.