Troubled Borrowers - who is really at fault?

Roach · March 20, 2008

http://money.cnn.com/2008/03/19/real_estat...dex.htm?cnn=yes

Many homeowners who were subject to predatory lending practices - including brokers who misrepresented payments - are trying to rework their loans. Few are having any luck.

I've been thinking about getting a house, so I'm somewhat interested in what's going on with the mortgage mess...

Every article I read mentions some fault of the borrowers.

In this article, we have this....

"She was basically deceived," said Karen Nigol of the Housing Education Resource Center in Hartford. According to Nigol, Boykin would not have been able to afford the loan without earning more income than she did at the time of the loan application. Nigol says the mortgage broker listed Boykin as his employee on the application, even though she was unemployed.
"In fact, he said to her, 'Congratulations, you now work for me,' and put down an additional amount of income that really wasn't true," Nigol said.

So this person signed a falsified document in order to get a loan.

Sure... the lender should not have done that, but I mean, come on.

I read article after article about people who didn't know what they were signing or didn't bother to learn what they were getting into (like with ARMS)....

That article paints a picture of the lending companies not willing to work with the borrower. I can't really fault them since the borrower, at least in this case, is at fault for doing something that they should not have done.

Wow....

flat rock stan · March 20, 2008

http://money.cnn.com/2008/03/19/real_estat...dex.htm?cnn=yes
Many homeowners who were subject to predatory lending practices - including brokers who misrepresented payments - are trying to rework their loans. Few are having any luck.

I've been thinking about getting a house, so I'm somewhat interested in what's going on with the mortgage mess...

Every article I read mentions some fault of the borrowers.

In this article, we have this....

"She was basically deceived," said Karen Nigol of the Housing Education Resource Center in Hartford. According to Nigol, Boykin would not have been able to afford the loan without earning more income than she did at the time of the loan application. Nigol says the mortgage broker listed Boykin as his employee on the application, even though she was unemployed.
"In fact, he said to her, 'Congratulations, you now work for me,' and put down an additional amount of income that really wasn't true," Nigol said.

So this person signed a falsified document in order to get a loan.

Sure... the lender should not have done that, but I mean, come on.

I read article after article about people who didn't know what they were signing or didn't bother to learn what they were getting into (like with ARMS)....

That article paints a picture of the lending companies not willing to work with the borrower. I can't really fault them since the borrower, at least in this case, is at fault for doing something that they should not have done.

Wow....

Loans are really tight right now but with the fed cutting 3/4 point the other day things will get better. :krazy Self employed don't make it any better. Good luck I thing now would be a good time. I just bought a second home that floats on the Columbia river but did a owner finance

TintDude · March 20, 2008

Who's really at fault? In my humble opinion it goes to the Federal Reserve system, which is niether Federal, nor a reserve. When it was set up, we were taken off the gold standard and issued a fiat currency, a piece of paper that holds no value at all. The "federal reserve" creates the money out of thin air and then loans it to the government for interest. If the Fed creates the money, and then charges interest on the money they print, by definition there will never be enough currency to repay those loans, so those privately owned banks now take possession of things with real value upon default of those loans that mathematically could never have been repaid in the first place. It's a pyramid scheme and we are at the bottom.

tint123 · March 20, 2008

When spending the type of $$ to buy a house, would it not make sense to have an Attorney make sure everything is on order and the way it should be ?

Cuttingedge · March 21, 2008

It basically comes down to being honest with yourself and only buy something that you can afford and not something you think you will be able to afford in the near future. There are many online calculators that can tell you what you can afford and its usually about 100K less than what youre realitor or new home salesman tells you. Youre best option may to be build, new home builders are offering lots of incentatives including low or no down payments. Just make sure you know what your property taxes will be after the first year. The first year, you only pay on the land and after it get reassessed with your new house on it, it will increase by thousands. That is where some people get into trouble.

March 21, 2008

It basically comes down to being honest with yourself and only buy something that you can afford and not something you think you will be able to afford in the near future. There are many online calculators that can tell you what you can afford and its usually about 100K less than what youre realitor or new home salesman tells you. Youre best option may to be build, new home builders are offering lots of incentatives including low or no down payments. Just make sure you know what your property taxes will be after the first year. The first year, you only pay on the land and after it get reassessed with your new house on it, it will increase by thousands. That is where some people get into trouble.

In the case of the adjustable arms...... Much of it has/had nothing to do with being honest with yourself. Many of these people got into the adjustable mortgage intentionally, many had no idea what they were getting into and the broker put them into a program with a high yield spread to put more money in their own pocket.

Both the homeowner that intended to enroll in the program and the homeowner that had no idea got screwed. Once the homeowners that had no idea started getting hammered with foreclosures the market started to tank, and home values went down. Then people that enrolled intentionally were locked into the program because they owed more than their home was worth and were unable to refinance because of it. This resulted in more home foreclosures and its faaaaaaaaaaaar from over.

If you're going to buy Roach, wait another 6 months. I just bought a new one and gutted it, I already feel like I paid too much! I can hook you up with a kickazz broker, he's my brother and he's straight legit. He'll be up front with you if he can or can't do anything for you and help you clean up your credit if it needs it. PM me if you're interested.

Roach · March 21, 2008

Thanks everyone...

I don't think I would do it before at least a year.... if ever. I really, really want to have my own place, but it's also nice not having the stress of a higher payment then what I got now, since if I don't have any jobs, I don't make any money.

I'm going to see how this year plays out work wise... try to get my credit in order... and see where I stand come years end.

I would *LOVE* to build a place. I know what I want the house to look like... my dream house since I was a kid. :rollin I don't have plans for it anymore, but when I was in HS I took AutoCadd for a few years and drew up my own blue prints for it. :twocents

Which hey... when the times comes, I will definitely look into that possibility. My friend owns some land that he's talked about building on... maybe I could get him to sell me a lot.

-R

March 21, 2008

buying a house is the most stressful yet rewarding thing in the world. I have bought to in the last 2 1/2 years and nothing stresses me out more than dropping that kind of money. if you have good credit right now is a good time to buy. you can get some of the repo houses for a really good price. or you can buy one at a pretty good price just because the property values are down right now. and if you have good credit than you can get a great interest rate. the market will come back around, and then you will have some equatiy in your house because the property value will go back up.

If you are renting right now then you are paying someone elses note plus insurance and property tax and then they are making some money off you. I know I make about 200 a month after cost are paid on my rent house. I guess what I am saying is you could live in the same house for much cheaper and it would be yours and every payment you make is like putting money in a savings account IF the property value in that area doesn't bottom out. any way thats my :twocents

TINT · March 21, 2008

Who's really at fault? In my humble opinion it goes to the Federal Reserve system, which is niether Federal, nor a reserve. When it was set up, we were taken off the gold standard and issued a fiat currency, a piece of paper that holds no value at all. The "federal reserve" creates the money out of thin air and then loans it to the government for interest. If the Fed creates the money, and then charges interest on the money they print, by definition there will never be enough currency to repay those loans, so those privately owned banks now take possession of things with real value upon default of those loans that mathematically could never have been repaid in the first place. It's a pyramid scheme and we are at the bottom.

I want to join the TRUNK SLAMMER club :asshat: