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Thread summary:

Home foreclosure gloom, ARMs or people just walking away, buyer responsibility, no blame placed on realtors, lender fault, lender secured by asset, overextending budget

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Old 07-26-2008, 07:13 AM
 
Location: OK
2,717 posts, read 6,295,380 times
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Quote:
Originally Posted by bentlebee View Post
I agree it is the responsibility of the person signing but what is the responsibility of the professionals who gave you the advise the buyer was lookin for and thought he was doing his due diligence but ended up in the referal circle of scruples professionals who where just after the buyers money to get a fast deal to get their commission.
n

And Va-Cat said:

Quote:
Sorry but I put the blame completely on the the buyer. No one held a gun to their head as they signed the loan agreement. If some one told me I could afford a 300K house on 35,000 annual income, it would be my responsibility to decide whether its a good idea or not. The lender is secured by the asset. The buyer is the one that has the ultimate decision on the transaction. As for working with the borrower. Its the lenders option. Many will work with their borrowers depending on the credit stability that was shown. No sympathy for the ones caught up in this because of greed or overextending. For them its now time to pay the piper.
What about those people who want to refinance after owning their house for 5 years and find out they are upside down in their mortgage because the house was overvalued when they bought it. I realize that there are some declining markets in this country but Oklahoma is not one of them.

What about those people who have a loan officer who "dials for dollars" ....calls around a bunch of appraisers until he/she finds one who is willing to appraise the property for what the LO needs to make the deal work?

What about the clueless realtor who works part-time, fitting real estate in between childcare and really doesn't understand the first thing about real estate and subsequently not only is incapable of advising their client properly, can actually do damage.

Many pros in the real estate business are just that ..... pros. But don't underestimate the yahoos who are in a fudicial position and should be able to be trusted by their clients but clearly can not.
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Old 07-26-2008, 11:44 AM
 
Location: Cary, NC
1,036 posts, read 3,629,100 times
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Quote:
Originally Posted by bentlebee View Post
what about the way higher referal giftcards or otherways mortgage brokers gave referal gifts to realtors, etc.....?
We see the stories on tv every day...for money ..many peole will do alot if they agree with it or not money talks. Any many are now feeling the financial burden because all of a sudden no one thinks he did anything wrong.

It is illegal according to RESPA for a bank/broker to give a Realtor (or vice versa) any money or item of value in exchange for business. Did it happen, sure... just like fraud happened. But already this is illegal and results in heavy fines, loss of license and possibly jail.

That is why I have to prove to Realtors, attorneys, insurance agents, financial planners and the rest of the people that send me referrals that I am honest, experienced and provide value to the clients they refer. That is all I can do to earn referrals, it is illegal for me (and it shoudl be) to simply buy their loyalty.

Can we say the same thing for builders that offered incentives to buyers to use the inhouse lender, sales agent or attorney? The way the law is written its not a "kickback", but it sure limits choice and has been shown (just read the forum) to result in higher rates or lower service than if you can compare and choose your own provider.


Quote:
Originally Posted by Schousse View Post
n
What about those people who have a loan officer who "dials for dollars" ....calls around a bunch of appraisers until he/she finds one who is willing to appraise the property for what the LO needs to make the deal work?

What about the clueless realtor who works part-time, fitting real estate in between childcare and really doesn't understand the first thing about real estate and subsequently not only is incapable of advising their client properly, can actually do damage.

Many pros in the real estate business are just that ..... pros. But don't underestimate the yahoos who are in a fudicial position and should be able to be trusted by their clients but clearly can not.

Those appraisers and loan officers should lose their licenses and be fined for fraud if that is what they did. In cases of fraud, I completely support loan modifications and restitution to borrowers that were hurt. The problem is many times I refused to do this exact thing and all that happened was that an upset borrower went down the street to find a lender/appraiser that would let them cash-out the money they "needed" for their vacation. That same borrower is now calling their lender and asking for a payment or loan reduction because they were "cheated". It's hard for lenders to seperate the clients that were deceived from those that were greedy.

I think that standards in real estate and lending should be increased. There are way too many part timers that have no clue about the business (although there are some good ones too) and provide zero service to their clients. I worked alongside enough "mortgage consultants" who did not have a clue how an ARM or negative amortization loan worked... so they couldn't explain it to their clients if they even wanted to. All they were trained for was selling the product, no time was really given to the risks/rewards except how to giv rebuttals to client's concerns.

In NC we are lucky that all mortgage brokers are licensed by the state. The requirements are still a little lax for my taste (and bank/credit union loan officers are exempt) but there is required in person course, exam and mandatory background (state and federal) and credit checks. There are still too many unlicensed, uneducated and dishonest players, but its a first step. In some other states (you can guess some of them) they just finally passed licensing requirements and they are still a joke.

I think part of the problem is that many real estate and mortgage brokers became a purely "sales job" the last few years. Yes the job involves sales, but its also a position with as much influence on the lives of our clients as CPAs, financial advisors, attorneys and other professionals. I have met many Realtors and loan officers that treat their job as a true professional and strive to provide value to their clients, but unfortunately there are enough out there just looking to chalk up another sale.
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Old 07-26-2008, 11:49 AM
 
Location: Cary, NC
1,036 posts, read 3,629,100 times
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Quote:
Originally Posted by desertsun41 View Post
I will not blame the home buyer. It's human nature to take the bait if some one is offering you something you cant have otherwise.

We need to get back to suing McDonald's for making us overweight. Lets also blame car companies, Plasma TV makers and fashion desginers for making products that us poor people with no self-control can't resist.

Or do you just want us to stop at the credit card companies for making it possible for people to buy these things? Where does PERSONAL RESPONSIBILTY come into play?
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Old 07-26-2008, 10:37 PM
 
Location: Southeast Georgia
65 posts, read 215,995 times
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Quote:
Originally Posted by Schousse View Post
What about those people who want to refinance after owning their house for 5 years and find out they are upside down in their mortgage because the house was overvalued when they bought it. I realize that there are some declining markets in this country but Oklahoma is not one of them.
They did not sign a loan contract that stated they would refinance them no matter what the economy did. Anyone who buys a house using a ARM and assuming they'll just refinance a couple years down the road to be able to afford it is asking for trouble. Better yet, anyone who bought a house in the last few years using a ARM has no sympathy from me considering interest rates have been at all time lows and they use a ARM to save a few bucks knowing it had no where to adjust but up.

Yes, many of the professionals in the whole process are unethical or down right crooked and the should be looked into too, but the buyers have only themselves to blame for signing a contract they knew they couldn't afford, signing a contract that they knew would adjust to something they couldn't afford, or just not paying their bill because they don't like that their house value dropped.

Would all these people that are upside down in their mortgages still be hollering if it went the other way? Would they be calling the bank to ask if they could increase their payments and payoff because the home appreciated 50%? No they wouldn't. You take the good with the bad. Not only that but everyone knew that housing was way overpriced and the bubble would bust one day. Heck, it was a regular topic on the news for several years.


The only ones I have sympathy for are those that have lost their jobs because of the mess the above buyers have put the economy into. These people bought responsibly and are now falling on hard times because of the irresponsible buyers.
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Old 07-27-2008, 12:10 PM
 
3,583 posts, read 10,253,572 times
Reputation: 5096
Quote:
Originally Posted by Schousse View Post
n

And Va-Cat said:



What about those people who want to refinance after owning their house for 5 years and find out they are upside down in their mortgage because the house was overvalued when they bought it. I realize that there are some declining markets in this country but Oklahoma is not one of them.

What about those people who have a loan officer who "dials for dollars" ....calls around a bunch of appraisers until he/she finds one who is willing to appraise the property for what the LO needs to make the deal work?

What about the clueless realtor who works part-time, fitting real estate in between childcare and really doesn't understand the first thing about real estate and subsequently not only is incapable of advising their client properly, can actually do damage.

Many pros in the real estate business are just that ..... pros. But don't underestimate the yahoos who are in a fudicial position and should be able to be trusted by their clients but clearly can not.
The people that find themselves upside down can do only one thing - wait it out. As I said - the person with the ultimate say in a real estate deal is the buyer. Its their responsibility to know what they are signing, what they are buying and who they are dealing with. Caveat Emptor
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Old 07-27-2008, 04:19 PM
 
Location: Pennsylvania, USA
5,217 posts, read 4,115,320 times
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Quote:
Originally Posted by bentlebee View Post
More foreclosure gloom - Jul. 25, 2008

So more cheaper deals to buy!

I wonder if these are all ARM's or how many are just walking away?

When will more be done and looked ito who are to blame and if they start the snow ball will go fast and the blame game will start. From mortgage brokers bad advise to realtor pushing their client to take the great deal and telling them how fast their property will double in value, to the appraiser who came up with an unrealistic value and a buyer who lied on their application...I hope they go after all of them and have them pay for what they did to others who are paying as what they signed for. The once who really couldn't help will be left out since no one has anything against them... I wonder what the percentage will be for these people...1%?
It is NOT a Realtors responsiblity to tell their buyer what mortgage product to purchase. Many realtors refer their customers/clients to a mortgage professional who goes over all their financial information. All the realtor needs to know is how much of a mortgage they are pre-approved for and they take it from there.

As for "pushing" people to buy bigger homes, well as prices climbed many buyers found themselves dissappointed with what was available in their price range.. they made the decision on what they could or could not afford all on their own. Realtors had nothing to do with the mortgage product or choice of product.. that they discussed with thier respective mortgage brokers.

I know of a spanish speaking woman who makes $2500 a year given a $400K mortgage with no money down. She didn't speak english well at all.. SHE was taken care of .

Then there is me.. who knew what I was getting into. Becasue I was self employed AND I had no current credit history ( I swore off credit cards to save money to buy/ fix a house) I was offered ONLY an ARM.. which was an ALT-A product.. not subprime. Put money down.. put money into my home! Was advised by mortgage lender to pay on time for 2 years, open some lines of credit.. score will rise, no problem. What I didn't know was that my home value would plummit putting me at 100% LTV and pretty much locking me out of a refinance (cause they stopped giving 100% Ltv loans to those self employed right around the time I needed to refi). So.. here I am, someone that makes a GOOD living and can afford a REAl mortgage (I was paying $3000/month for my very modest home in a modest neighborhood) and paid on time.

It's those that took out those exotic loans that never would have been able to afford a "normal" interest rate (not those low 1 or 2% or those that were only paying interest!). I was paying 6.95%!!!!

Oh.. and now I'm short selling cause my adjustments have put me over the edge to the point that I can't afford my house.. and my appraisal came in at $120K less than the appraisal I had when I got this mortgage!!!!

So.. NOT ALL stuck in this mess are irresponsible, wreckless, stupid I can go on. NOt all of us didn't put money down.. as a matter of fact, I put money down and money in.. I"m loosing over $100K between payments and renovations on my house. Some of these people like myself , that are being foreclosed on are just as much a victim of the subprime mortgage diasaster as the rest of you? why do I say that? Because if they hadn't been giving those exotic mortgages that started defaulting I would be refianced now into a fixed rate mortgage and not loosing my shirt.

Had NO idea the market could or would crash so hard? Did I think that it would increase in value at the same tick it was.. no .. but certainly didn't think that it would crash as hard and fast as it did.. and my value could plummit so much.. and with all my improvements to boot!

Be careful when lumping all of us in the same category..

so .. who''s really guilty.

Those companies that came up with these exotic packages and then approved people who NEVER should have been given any sort of mortgage in the first place.

Then the people who packaged them and sold them to Wall Street

Wall Street for being so stupid and greedy that they turned a blind eye to what was going on.

More mortgage brokers that then jumped on board and pushed harder for the products.

Those that KNOWINGLY signed these documents and didn't bother to know what they were signing.. or didn't care..and were being greedy themselves (yes there are a few).

Again.. I knew what Iwas signing... I was just advised that refinancing after 2 years if I followed all the steps (which I did) would be no problem!! That turned out to be bad advice.
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Old 07-27-2008, 06:01 PM
 
Location: Southeast Georgia
65 posts, read 215,995 times
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TristansMommy, while I do feel for you, it was not stated in your loan contract that you would be able to refinance in 2 years, you could have got a fixed rate (by going FHA for example) if you had decent credit or no credit record but a personal history showing you could afford the home, and it was regularly reported on the news that sooner or later the overpriced housing bubble would bust (just nobody knew when). If you bought using an ARM assuming that you could just refinance in a couple years to be able to afford the place, then you aren't much different than that spanish speaking lady you mentioned. It just took longer to catch up with you.

I'm sorry if this sounds harsh, but you signed papers saying you agreed to pay and that the interest rate could go up. If you couldn't afford a heavy hike in payments from the start, then you bought more than you could afford.
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Old 07-27-2008, 06:19 PM
 
Location: Pennsylvania, USA
5,217 posts, read 4,115,320 times
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Quote:
Originally Posted by phantoms View Post
TristansMommy, while I do feel for you, it was not stated in your loan contract that you would be able to refinance in 2 years, you could have got a fixed rate (by going FHA for example) if you had decent credit or no credit record but a personal history showing you could afford the home, and it was regularly reported on the news that sooner or later the overpriced housing bubble would bust (just nobody knew when). If you bought using an ARM assuming that you could just refinance in a couple years to be able to afford the place, then you aren't much different than that spanish speaking lady you mentioned. It just took longer to catch up with you.

I'm sorry if this sounds harsh, but you signed papers saying you agreed to pay and that the interest rate could go up. If you couldn't afford a heavy hike in payments from the start, then you bought more than you could afford.
First off.. no one told me I could go the way of FHA, for one. I was never advised by a mortage professional that that was suitable for me. yes.. you're right.. my credit score was not great, but it also wasn't bad either.. Subprime mortgages were given to those with poor or bad credit. Alt-A loans, which is what I have, were given to those with an okay (but not spectacular) credit score. My score was just not quite there to go stated, self employed for a fixed.. Period.. that's what I was told. However, my score was not too far off and all that was needed was for me to establish recent run of good credit.. ie: paying my bills on time which is exactly what i do, have been doing .

The difference between me and the Spanish speaking person is that had I been given a FIXed mortgage to begin with I had enough income to afford my home appraised at $450K (and remember.. I din't take out a 100% ). I am someone that truly can and does deserve to own a home.. paying $3000 a month in mortgage payments! The spanish speaking lady purchased a home at the same price as mine, with a n 80 percent loan and a second mortgate at 20 and she only makes $2500 a month.. and she was only paying interest for the first few years. She was taken advantage of because she didn't know the language and trusted her mortgage broker to help her understand because she didn't understand the language.

Third.. I didn't really hear much talk or buzz in 2005 at what is now knowns as the height of the market that itwas going to crash. There was some buzz about it.. but homes were flying off the shelves and mortgages were still going out.. no end in sight. If the financial genuises on Wall Street couldn't see it coming and the banks couldn't see it coming, than certainly i couldn't. Remember.. I also was not relying on my house appraising to get my mortgaeg refinanced.. THAT was NOT was I needed to get a refi (more equity).. simply a higher credit score which is exactly what I had achieved by doing exactly as I was advised. I never said that it was written in my contract that I could refinance (although my loan did not carry a pre-penatly mind you).. I said that I was ADVISED BY PROFESSIONALS that it should be no problem, as paying my mortgage on time for 2 years as well as establishing lines of credit and of coruse keeping those on time would raise my score enough for a lender to qualify me for a fixed interest!

What happened is that the market nose dived.. the percentage I put down on my home was lost AND The mortgage industry froze up on lending to people like my.. those that are self employed..

When refinancing became an impossiblity all I asked for from my mortgage company was to keep the interest at 6.95% which was above the current prime anyway and just not to raise it to the 9.95% in teh first adjustment (and rise every 6 motnhs thereafter). Stupid for them NOT to because had they kept me where I was I'd still be paying my mortgage, NOT shortselling where the house is now worth $120K less than what the house was appraised at when I got the mortgage. I would be in a house that I owe more money on than it's worth.. but I wouldnt' have cared because I wanted to stay.. I am a case that COULD have worked out for the better.

there is no hope for the woman making $2500/month with a mortgage that large..

My point is that not all fo us should be lumped into the masses. .. Some of us facing foreclosure are more victimes of circumstances of the market than of greed or sheer stupidity... but of something that was completeloy out of my control. When calculating mya bility to refinance this scenario didn't play into it.. because I simply did not know it could occurr.

Beleive me.. if I knew I'd be going through what I am going through now I never would have purchase. I didn't just blindly do this and with reckless abandon.
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Old 07-27-2008, 08:43 PM
 
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For crying out loud. Anyone who signs a ARM note is taking a gamble. Period. Anyone who buys a house hoping the appraised value and rates will be low enough to refinance later is taking a gamble. Period.

Seriously, when you lose money in Vegas do you ask for your money back?

When a person knows that they make $2,500 per month and they are signing a $400,000 note a question mark doesn't go off in their head? Something doesn't seem right there? They have absolutely no one in their life to consult?

Those in the industry who were dirty will get what's due to them. The people who took any loan but a fixed rate that they could actually afford need to accept the fact that they made a bad decision and stop complaining and crying victim.

Not everyone was preyed upon. Nobody was forced to jump on the housing bandwagon. Not everyone deserves to own a home. Nobody is entitled to anything.

Many have to accept the fact that they made a bad decision, bad choice and figure out how to move on.
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Old 07-28-2008, 05:49 AM
 
25,351 posts, read 37,514,449 times
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Quote:
Originally Posted by Schousse View Post
n

And Va-Cat said:



What about those people who want to refinance after owning their house for 5 years and find out they are upside down in their mortgage because the house was overvalued when they bought it. I realize that there are some declining markets in this country but Oklahoma is not one of them.

What about those people who have a loan officer who "dials for dollars" ....calls around a bunch of appraisers until he/she finds one who is willing to appraise the property for what the LO needs to make the deal work?

What about the clueless realtor who works part-time, fitting real estate in between childcare and really doesn't understand the first thing about real estate and subsequently not only is incapable of advising their client properly, can actually do damage.

Many pros in the real estate business are just that ..... pros. But don't underestimate the yahoos who are in a fudicial position and should be able to be trusted by their clients but clearly can not.
So ture...I havr reak posts from realtors stating they are not to blame and in most cases maybe not but what about the realtor who tried to convince the buyer that paying $ 5,000 or $ 10,000 more would not be so bad, just $...more a month for getting their dream house.., that one chance of getting it and pushing them over the hill that way...but the $ 50.- or $ 100 a month could be so much more, higher closing costs, high insurance, higher property taxes...maybe not much but add it all up for some one who was already at their limit....where are all the realtors selling properties under the slogan..."it will be worth so much more in a couple of months", I heard it over and over but it seems no realtor has said it according the posts I read....is this the truth or just saving their a...

How many appraissers over valued the houses and were at the houses because they were asked to by a realtor and mortgage broker working all the time together? All involved are to blame IMO, even the professionals who didn't understand it them self....if you are in the business you should understand what the concequences are for the advise you give.
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