Dodd-Frank & Private Lenders on Owner Occupied House

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If a private lender (individual, not a licensed lender) violated several Dodd-Frank regulations in giving a 2nd mortgage, what would happen if the lender tried to foreclose?

Violations include:

"Lender" knew "borrower" was an owner occupant

Lender did no credit check.

Lender did no income check.

Lender is threatening to start foreclosure process after 7 days late on 1 payment. 

Lender knew the funds where going to be used for personal expenses and not business/investing expenses.

Lender made the loan in the name of a private individual, not an LLC.

Thank you in advance. 

Let me know if there are any questions please.