Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Home foreclosure gloom, ARMs or people just walking away, buyer responsibility, no blame placed on realtors, lender fault, lender secured by asset, overextending budget
While Realtors do not often choose the appraiser, on more than one occasion I had a Realtor pressure me to pressure an appraiser to make a deal work. Or the Realtor simply asked me to do things WAY beyond their knowlege or experience, like take a client stated or into an ARM to qualify them for $50,000 more than we could. I would explain to the client why this was risky and why I would not recommend it, but there were always plenty of brokers willing to ramp up the loan amount to make it happen and get more big referrals from a Realtor.
Sure the loan officer and the borrower are the "most" guilty parties here.... but don't tell me that the Realtor is absolved of all guilt because he was merely selling a home. Plenty of greedy Realtors were "up-selling" borrowers with promises of 20% appreciation, same as loan officers were selling promises of refinances in 2 years. No one was an innocent party, a Realtor showing a Burger King cashier $500,000 homes should have stepped in and advised them, they have a FIDUCIARY DUTY to their clients after all.... why not step back and be the "ethical" one in the transaction than simply wash your hands of guilt by blaming the loan officer that took the application and the bank that approved it?
Thank you for your honesty. Your story sounds so familiar and sad. Mike Peterson is all the time denying it but I have heard otherwise and you confirmed it just like home owners and appraisers I know.
To Mike Peterson: Why not blame the seller? If no one is buying for the prices listed, the prices would have dropped and most of them, as you have mentioned before, were working with a realtor and I guess advised about the sales price.
In a market that is up no one in their right mind would try to sell their home for a low price and a house is worth what the person is paying for, isn't it?
On the other hand for obtaining a mortgage it is also worth what it is appraised for and maybe MP is the only realtor who never refered any one and is so innocent as he wants us to believe he is. IMO evry one who was involved in these mortgages is partly guilty except the seller, because if no one would have paid they would have been stuck with it, and MP would be famous for being the only realtor in the USA would had seller selling for way below market price and IMO that didn't happen since I never heard your name in this area or on the news.
And I understand what you are saying.. I never expected the value of my home to keep climbing.. I never expected the interest rates to stay low forever and knew they would rise (however, a steep rise was not giong to happen and hasn't happened.. that I knew.. .we weren't going to suddenly see a prime of 5% jump to 10% in two years) and the small climb in prime was accdeptable .. remember.. i was paying 6.95% anyway... above prime. My ONLY expectation was that I would be able to refinance into that fixed rate by that 2 year period. Not really that unreasonable or far fetched.
You were misssing my point of the post completely.. of which there were two. For one.. given the fact that I purchased a home and was affording an interest rate of 6.95% .. not paying interest only or an unreasonabley LOW interest rate... I'm obvious someone that could afforrd to be in a home. those that purchased and could only afford a 1 or 2 or even 3% interest or could only afford the interest and could never have afforded the house when it adjusted to a Normal (and by normal I mean what most others were paying at a fixed rate). But those people in that situation that purchased anyway and then started defaulted put into motion the conditions that created this market mess, thereby creating a scenario that has now caused me to be in foreclosure.
And the second point is that while the banks are crying because they are hurting and these investment groups (turns out my mortage is bundled with some investment group on Wall Street) they are not doing all they can to keep the pain less severe. All the investors had to do with me is keep my rate fixed and keep me paying my mortgage back at the 6.95%..not too unreasonable. I obviously have been affording that for the past ..well 2 /12 years now. There are those, like the woman making $2500/month that there really is no hope for.. But the banks/investor groups are retarded and are shooting nose off to spite their face..t hen expecting the gov't to bail them out.. This whole problem could be lessened if the banks would just work with their mortgager.
Was taking an ARM out a risk? Sure.. but without the scenario factored in that has occured in the market now, the risk was relatively low. Most of the factors I could even figure into the plan were the ones in my hand.. pay every thing on time and raise the score.. all of which I was careful to do even if my home lost a little equity that would be okay.. but what it lost was insane.. and again. I say how can anyone factor in a market condition that was not even in the relm of possibility as far as they knew. for crying out loud the big shots in finance didn't even see this coming so how the hell could I?
As for moving on .. I have. I've done my crying, done my arguing with the bank etc. Im' now short selling and grateful to get out from under it. I"m loosing my shirt and have learned a valuable and expensive lesson. I'm also movign from where I live to greener, more affordable pastures. Once I short sell I'll repair my credit and buy my next home in 2 years (hopefully the house we liked this weekend and will rent will be the one we buy in 2 years) .
but I do plan on writing the "investors" holding my mortgage a nasty letter telling them how retarded they are.. see.. my house value plummted $120K in value from the original appraisal and they woulod take 90'% of that value.. all thistime they could have kept me paying them a 6.95% of my mortgage rather than have me short sell the house for over $120K less than it's original value and $100K less than I owe (without the fees now tacked on it's more). As far as I'm concerned THEY ARE THE STUPID STUPID STUPID ONES.. but in a way I guess i should thank them because I'll no longer be overpaying for a house now worth so much less
You are blaming the investors so much....and of course the investors who bought these mortgages are maybe to blame but they didn't make the rules...if they didn't have the money and took the risks, you would never had a chance on buying in the first place because you have to remember that you didn't own the house really, you basically rented it from the mortgage company who got the money from the investor and you weree paying the mortgage/rent to the mortgage company....so you didn't own your house at all....only after you paid the mortgage off so don't blame the hand that feed you to much, you didn't have a gun to your head and you gambled and lost, but also could have won and what than....would you thank them.....you signed the papers, more people never signed an ARM just a small percentage did and a bigger percentage is affected by this mess!
You are blaming the investors so much....and of course the investors who bought these mortgages are maybe to blame but they didn't make the rules...if they didn't have the money and took the risks, you would never had a chance on buying in the first place because you have to remember that you didn't own the house really, you basically rented it from the mortgage company who got the money from the investor and you weree paying the mortgage/rent to the mortgage company....so you didn't own your house at all....only after you paid the mortgage off so don't blame the hand that feed you to much, you didn't have a gun to your head and you gambled and lost, but also could have won and what than....would you thank them.....you signed the papers, more people never signed an ARM just a small percentage did and a bigger percentage is affected by this mess!
First of all.. I'm not blaming the investor for the initial problem.. HOWEVER.. I am blaming the investors for not finding the SMART solution to the problems. .that is the difference.
Don't you think, based on my scenario, that it is foolish for them to throw Me out of my home and take the loss along with those that can't afford to pay a real mortgage in the first place.
I think that they have alot of nerve crying to the gov't for bail outs when they can lessen their pain by re-evaluating their borrowers and finding realistic soluctions.. instead they've got their head up their .. well you know what..giving the standard answers or "codes" that they had from teh past.. meanwhile this type of situation is somethign we have not really faced before. Rather than being so ridgid they could be saying..okay.. how can we minmize our losses here.. lets see.. we have a borrower here that was paying us back at 6.95% for the past 2 years.. she paid on time..etc. she's asking tofix the rate. and wants to stay in her home..and gee.. she can afford to keep paying us at that ABOVE PRIME RATE for the next 30 years.. we should let her stay in her home and modify her into this rate and lock it at that!!
THAT would be smart.. however, what they are doing is just plain stupid, foolish and IMO.. dumb busienss sense! So , while they are not to blame for the initial problem.. they certainly are to blame for the severity of the problem in not doing what they can to stop the bleeding, so to speak!
Thank you for your honesty. Your story sounds so familiar and sad. Mike Peterson is all the time denying it but I have heard otherwise and you confirmed it just like home owners and appraisers I know.
If 99% of a group are doing the right thing and 1% are doing the wrong thing then to state that the group does the wrong thing is just showing a bias. You have shown your bias numerous times.
To Mike Peterson: Why not blame the seller? If no one is buying for the prices listed, the prices would have dropped and most of them, as you have mentioned before, were working with a realtor and I guess advised about the sales price.
Realtors advise on list or sale price, they do not set these prices. The seller has the ultimate say on the list price.
As I said, if you are going to blame everyone else you might as well include the sellers. They were the ones selling for that price weren't they?
In a market that is up no one in their right mind would try to sell their home for a low price and a house is worth what the person is paying for, isn't it?
On the other hand for obtaining a mortgage it is also worth what it is appraised for and maybe MP is the only realtor who never refered any one and is so innocent as he wants us to believe he is. IMO evry one who was involved in these mortgages is partly guilty except the seller, because if no one would have paid they would have been stuck with it, and MP would be famous for being the only realtor in the USA would had seller selling for way below market price and IMO that didn't happen since I never heard your name in this area or on the news.
If you would have taken the time to actually read the responses in this and the many other threads that you have started you would have come across many other agents that do not refer to mortage brokers nor sit in on the financial discussion between the buyer and mortgage broker.
I will say one other thing. I may not be famous but people I deal with can trust my word and everything I post on these boards is the truth.
Can you say the same?
If a realtor doesn't agree with a listing price he shouldn't take the listing, but I guess the commission of a higher sales prices is sweet
No the market is down, I have seen realtors walking away from houses they couldn't sell within the first month and went forward to the next...that is why many people complained about the work that was done compaired to the promisses when they signed the contract to list their home.
Of course the person who signed the mortgage paper is to blame, but the once who called them self professionals and are in this business to advise the once who are told not to go FSBO since they have no experience, were trusting the professionals whoever they might be, and than were told they had to do their due diligence, so when ever it is convinient they are told something else.
But I do agree if people lied on their application or knew that if they would have to pay rent of $ 2,500.- and can't afford that they should have known that a mortgage of $ 2,500 a month is the same and they can't afford that either, and on top of that is owning a house coming with more responsibilities of maintaining the home, paying the home insurance, property taxes, etc., and still IMO many realtors showed homes that were too expensive in the first place for these home owners and IMO you can't blame the sellers...realtors should have shown less expensive home (smaller homes), but the commission waiting at the end is so attractive that a $ 250 K is not so nice as a $ 300K home if you can close on it at the same time....money talks and people do crazy things for money and many are guilty....starting with the people crying out to come up with mortgages for the people with less income, the lawmakers who didn't see the loopholes, the mortgage brokers who didn't check if the application was correctly filled out, appraisers who appraised for higher than it was worth, realtors who took the buyers by the hand to show homes the buyer hardly couldn't afford and telling them that within a year the home would be worth at least 20% more (proven over time!!!! the would say, not telling them that this wasn't 100% safe), Buyers who lied on their application or the once who took equity out without having the funds to pay it off, etc.........
If a realtor doesn't agree with a listing price he shouldn't take the listing, but I guess the commission of a higher sales prices is sweet
Um.. I don't know where you have been or what you have seen .. but this is how it went.. Realtors walk away from unreasonably priced homes even in a good market. Many would see that their neighbor sold the same exact home for x amount of dollars but because they had the better nails, pull out garbage cans or other silly items in their home they thought their home was worth 100K more.. so the Realtor would be like WHATEVER adn NOT take the listings. Some did and those homes, even in a hot market, didn't sell
Now.. as for what happened when the home was listed at "X dollars.. herer it went. You priced the home based on a similar home. So house X sold for $300K. You always ask more than what you expect to get so you can negotiate so you ask say $335K. But guess what.. the first open house you had like 10 people and 5 put in offers..each higher. It is the Realtors job to get the best price for the home.. it is their requirement by law.. and that meant that they had to call every buyer and say " I HAVE A HIGHER OFFER" and guess what..some would drop out, but others would keep raising and uping their offer until the house went to either full asking or in most cases over asking. So now, a month later.. the same house that was sold for $300 down the block now has a house similar selling for $335K and better.. so the next person lists their house at $350K hoping to get the same as that neighbor that got $335K.. see where I'm going with this?
No the market is down, I have seen realtors walking away from houses they couldn't sell within the first month and went forward to the next...that is why many people complained about the work that was done compaired to the promisses when they signed the contract to list their home.
the problem is NOT that the Realtor can't sell the home.. but more likely the owner is not realistic. Now you have to price on a downward turn.. adn a lot of peope just can't grasp that.. so no realtor is going to work for an unreasonable, unrealistic homeowner who won't listen to the sound advice they are gtting..
Of course the person who signed the mortgage paper is to blame, but the once who called them self professionals and are in this business to advise the once who are told not to go FSBO since they have no experience, were trusting the professionals whoever they might be, and than were told they had to do their due diligence, so when ever it is convinient they are told something else.
No matter what market.. hot or slow.. FSBO is the worst way to go.. it really is.. and in this market it is more so ..in the hot market the FSBO's weren't getting as much as those that were really "on the market" becasue they didnt' have the latest up to date information. they hurt themselves by not maximizing what they could get from the home.
But I do agree if people lied on their application or knew that if they would have to pay rent of $ 2,500.- and can't afford that they should have known that a mortgage of $ 2,500 a month is the same and they can't afford that either, and on top of that is owning a house coming with more responsibilities of maintaining the home, paying the home insurance, property taxes, etc., and still IMO many realtors showed homes that were too expensive in the first place for these home owners and IMO you can't blame the sellers...realtors should have shown less expensive home (smaller homes), but the commission waiting at the end is so attractive that a $ 250 K is not so nice as a $ 300K home if you can close on it at the same time....money talks and people do crazy things for money and many are guilty....starting with the people crying out to come up with mortgages for the people with less income, the lawmakers who didn't see the loopholes, the mortgage brokers who didn't check if the application was correctly filled out, appraisers who appraised for higher than it was worth, realtors who took the buyers by the hand to show homes the buyer hardly couldn't afford and telling them that within a year the home would be worth at least 20% more (proven over time!!!! the would say, not telling them that this wasn't 100% safe), Buyers who lied on their application or the once who took equity out without having the funds to pay it off, etc.........
Realtors do not decidev what price range to show homes in! Why can't anyone understand that concept. Any realtor worth anything would make sure that whatever person they were showing homes to was pre-approved for that purchase price. . and all that financial information was worked out between the mortgage broker and the buyer.. If the owner was approved for $500K purchase they were probably shown homes up to $535 in the hopes of negotiating to their maximum. It was the buyers responsibility to let the Realtor know what their comfort level was.. if $500K was their max but was uncomfortable, then they should say so . Realtors don't really ask what you make a month etc. they want to know how much you have for down payment and what you are pre-approved for from the mortgage lender.
If a realtor doesn't agree with a listing price he shouldn't take the listing, but I guess the commission of a higher sales prices is sweet
No the market is down, I have seen realtors walking away from houses they couldn't sell within the first month and went forward to the next...that is why many people complained about the work that was done compaired to the promisses when they signed the contract to list their home.
Of course the person who signed the mortgage paper is to blame, but the once who called them self professionals and are in this business to advise the once who are told not to go FSBO since they have no experience, were trusting the professionals whoever they might be, and than were told they had to do their due diligence, so when ever it is convinient they are told something else.
But I do agree if people lied on their application or knew that if they would have to pay rent of $ 2,500.- and can't afford that they should have known that a mortgage of $ 2,500 a month is the same and they can't afford that either, and on top of that is owning a house coming with more responsibilities of maintaining the home, paying the home insurance, property taxes, etc., and still IMO many realtors showed homes that were too expensive in the first place for these home owners and IMO you can't blame the sellers...realtors should have shown less expensive home (smaller homes), but the commission waiting at the end is so attractive that a $ 250 K is not so nice as a $ 300K home if you can close on it at the same time....money talks and people do crazy things for money and many are guilty....starting with the people crying out to come up with mortgages for the people with less income, the lawmakers who didn't see the loopholes, the mortgage brokers who didn't check if the application was correctly filled out, appraisers who appraised for higher than it was worth, realtors who took the buyers by the hand to show homes the buyer hardly couldn't afford and telling them that within a year the home would be worth at least 20% more (proven over time!!!! the would say, not telling them that this wasn't 100% safe), Buyers who lied on their application or the once who took equity out without having the funds to pay it off, etc.........
Well, even though I have said this in direct response to you at least 5 times I will say it again.
Please let me know if you do not understand what I am saying and I will try to break it down further for you.
Realtors do not choose the price range of the homes that buyers go to see.
The buyer will determine the price range they want to look in.
If they are not sure, they are encouraged to get preapproved. The mortgage broker will then tell them what price range they should be able to look in based upon the financial information they provide.
Do you honestly think when a buyer walks in my office I just say, "O.K., lets look at $600,000 houses today."?
Even if I did, it would then be up to the buyer to either tell me I am out of my mind or yes, that is what we want to look at.
Now on the other hand it seems as if you are also saying that Realtors should have shown homes that were much lower than what the buyer wanted to look at, "many realtors showed homes that were too expensive in the first place for these home owners ".
Who are you to tell anyone what they can and can not afford?
Not everyone with an ARM is in foreclosure.
Not everyone who put zero down is losing their home.
Not everyone lied on a loan application.
Please try and come up with some new material though.
This is getting quite tiresome.
There are plenty of otherwise good buyers that are now trying to sell that are caught in a very down market through no fault of their own.
A great deal of the 'fault' is the widespread easy credit attitude of "how much a month?"
Rent-A-Center's success proves this......car salesmen whose biggest question is "how much do you want to pay a month?"....the monthly payment on credit cards being the deciding factor on a purchase.
I was in a few different types of sales and since I was the "professional" I would guess 80% , at least, of the people I sat with trusted me to be giving them their best options and were mainly interested in "how much a month?"
Of course it doesn't relieve them of their responsibilty but on the other hand, these are basically trusting people who felt they were doing good to go to a "professional"
There is enough blame to go around but everybody involved has to share it.
Although it's going to hurt (myself included as a recent seller) my hope is that how credit and financing is looked at will change(I do have to say, I don't hold out much hope for that hope )
There are plenty of otherwise good buyers that are now trying to sell that are caught in a very down market through no fault of their own.
A great deal of the 'fault' is the widespread easy credit attitude of "how much a month?"
Rent-A-Center's success proves this......car salesmen whose biggest question is "how much do you want to pay a month?"....the monthly payment on credit cards being the deciding factor on a purchase.
I was in a few different types of sales and since I was the "professional" I would guess 80% , at least, of the people I sat with trusted me to be giving them their best options and were mainly interested in "how much a month?"
Of course it doesn't relieve them of their responsibilty but on the other hand, these are basically trusting people who felt they were doing good to go to a "professional"
There is enough blame to go around but everybody involved has to share it.
Although it's going to hurt (myself included as a recent seller) my hope is that how credit and financing is looked at will change(I do have to say, I don't hold out much hope for that hope )
I agree the blame has to be shared by everybody involved, but there is one group that blames others and that is nor fair IMO. On the realtors forum you can read frustrated buyers who are taking to houses only close to the price they are approved for, but the realtors don't show them the lower once. You can say "oh they are approved and I didn't do that", but should a responsible realtor not think about the other things that has to be paid by a buyer....property taxes, maybe some things that have to be fixed and wasn't expected, etc...just room to have some money left. Most complain that if they are approved for $ 250 K they see homes close to $ 250 K or just above and the realtor try to negogiate to the $ 250 K or have them try to get a little bit higher mortgage...of course there are the once who are responsible, byt I get sick of the once who just "oh I never have done that and never gave a referal to a mortgage broker and it wasn't me who has clients who are defautling right now. When this realtor lives in the Tampa area and we have such a incredible high rate of houses that either foreclosed or are in foreclosure and stating non of my clients....wow this can't be for real. I have way more respect for people who would say something went wrong and we have to make it better...because that is what happened...just talk to the people (who were just as much to blame, but also trusted their realtor who referred them to the mortgage broker with the best chances to close the deal who got the "best" appraiser involved), yes all are to blame and IMO it isn't fair for that group to say "we didn't do anything wrong".
Just look at the numbers of realtors in my area who are defaulting them self on their 2nd or 3rd home with ARM's, they didn't even know it was bad for them and these people advised others
In 2003, when we bought the house we recently sold, we gave our realtor all of our requirements. These included the areas we were considering, sq. footage, lot size, beds and baths, how old it could be, and max. price. He then pulled all the homes on the market that met those requirements and my wife and I decided which one to look at and, eventually buy. Why would a buyer continue to work with a realtor that does not let them choose which houses to look at and buy?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
