However, I do find myself wondering how the person is really harmed.
For one, their credit tanks, and credit reports are being just for everything from employment to auto insurance these days.
Mal ,'Safe'
Off-topic discussion. Wanna talk about corsets, duct tape, or physics? This is the place. Detailed discussion of any current-season TV must be whitefonted.
However, I do find myself wondering how the person is really harmed.
For one, their credit tanks, and credit reports are being just for everything from employment to auto insurance these days.
I spoke to [redacted] the [redacted] this week and she told me about a new product she is seeing called Option Arms.
The way the work is the borrower is given a payment coupon with three different payment options; a 30 year amortization (the high payment) an Interest Only (the medium payment) and a Negative Amortization (the low payment) Many borrowers will opt for the lowest payment, the negative amortization.
The lender will allow the borrowers to pay this until they hit 115% loan to value. At that point the lender requires a full payment based on a 30 year amortization. The borrower can't afford this new payment and since they now owe 115% of the value of the home they can't sell or re-fi and they lose the house
By any chance is this Countrywide? I ask because one of the loan payments I have processed in the past was like this and we had to be really careful as to which amount got paid.
I'm kinda with megan. Just how much responsibility doesn't lie with the person defaulting? Do we give a pass for stupidity? Easily intimidated by fast talking people so you sign fast? It's not fair that some people were bamboozled. Unfortunately, it was more or less legal. So fix the industry so that can't happen anymore and prosecute the less legal aspects.
I don't consider myself stupid and yet, I believe I'm in this boat. Not asking for a pass. Just asking you to be gentle about passing judgment. Things happen.
I'm done with school for the next three days! Whee!
I'm kinda with megan. Just how much responsibility doesn't lie with the person defaulting? Do we give a pass for stupidity? Easily intimidated by fast talking people so you sign fast?
The whole homebuying process is scary, complicated and intimidating. Terms like "rate lock" "option period" "earnest money" freak people out. Everything is on a tight schedule. It's pretty easy to convince someone that they'll lose their option money, plus whatever fees they've paid for an inspector if they don't stop dithering and sign.
It's not stupidity, it's misinformation or outright lying. I put probably 90% of the blame for owner-occupied forclosures on companies looking to close a bunch of loans quickly without giving their buyers the information they need.
It's not stupidity, it's misinformation or outright lying. I put probably 90% of the blame for owner-occupied forclosures on companies looking to close a bunch of loans quickly without giving their buyers the information they need.
Yeah, its not referred to as "predatory lending" for nothing.
For one, their credit tanks, and credit reports are being just for everything from employment to auto insurance these days.
This. And it's there for a while.
By any chance is this Countrywide?
Redacted isn't with a mortgage company. He/She is a lawyer.
I kept telling them that I couldn't afford it, I'd have no money for a downpayment or a cushion if something went wrong with the place or if my fees were increased. Now, they're all telling me I was right to rent.
Which may be true. But there are (mostly conventional loans through banks) programs that help low to moderate income borrowers put little to no payment down, though you'll likely pay PMI (still there are programs to reduce that too) until you have 20% equity.
There's no reason it can't be done. It just takes making sure you have all the information you need.
Redacted isn't with a mortgage company. He/She is a lawyer.
Ah.
I think cases of misinformation/lying are clearly wrong and should be sanctioned/punished/something. But many of the things we are talking about to me simply sound risky. And risky is something you are allowed to do. Of course, you should know the risks going in and it doesn't make you stupid if your gamble fails. But neither should it be a surprise to you if your gamble fails when the odds were stacked against you to begin with. Which doesn't mean that it doesn't suck hard when it fails.
It's not stupidity, it's misinformation or outright lying. I put probably 90% of the blame for owner-occupied forclosures on companies looking to close a bunch of loans quickly without giving their buyers the information they need.
I don't think it's stupidity. And certainly many subprime lenders are simply taking advantage of the fact that so many people are so clueless about money. I'm really trying to budget to be able to pay off my ginormous student loans and I've been listening to a lot of Dave Ramsey on the radio. The number of people that call up with $500/month car payments, or that can't believe the rate on their "adjustable" mortgage is going up is just astounding.
Loans terms are complicated and I feel very sorry for people that were outright deceived by lenders, but there is also a culture here of living way beyond your means and I think that plays a very important role in what's going on.
ETA: Or what Stephanie said.