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.
There's a reason why it's called "predatory lending practices".
And it's not because the banks take the moral high ground
Legal mortgage loans are not called predatory lending. Legal mortgage loans have NOTHING to do with predatory lending. Bringing the term into this issue does nothing to further the discussion.
It appears the OP's relative made a very common agreement to borrow money and pay it back in monthly installments using a house as collateral. There's no indication the lender did anything sleazy or underhanded, or that any of the terms of the agreement were unfair or in any way hidden. Let's stick to actual facts, shall we? Yes, the borrower can exercise the option to not pay the money back, and will therefore eventually lose the house to the lender. The lender gets screwed. And yes, that is "legal" as it is the remedy to which the lender agreed when they made the loan. But let's not try to make it sound better by trying to cast the lender as some sort of bad guy in this.
Sigh. legal mortgages also have an agreement, if you stop paying then X occurs. Thats what she is doing, its all part of the agreement. This isnt some morality play. The banks charge you interest based on all of this.
BTW have you ever thought about WHY banks let people stay? Its not out of the kindness of their hearts. Its because while the banks are slowly moving folks out they are also selling vacant houses. If a house is vacant for too long it falls apart. Sometimes amazingly quickly. If too many properties hit the market at once the price point drops, if they have too many for sale they have to officially take the loss.
In other words-the reason it takes so long is by the banks choice. And its not a morality choice for them. This is all business, just as it should be with her. All this "your word is your bond" is fine. Guess what? she signed documentation laying out how all of this works if she doesn't pay, and she is following that section of the agreement.
If the gov't wouldn't have bailed out Fannie & Freddie then many of these defaults wouldn't be happening. The lender would enforce their deficiency judgment by getting a wage garnishment and it would affect the borrower for the rest of their life.
Telling a lender that you are not going to pay them, so they better negotiate with you for a short sale is hardly a voluntary business decision on their part. It's coercion in the highest sense of the word and is forcing the lender to do something that they'd rather not do. But because they've been bailed out, any losses are basically forced on your neighbors in the form of higher income taxes and/or higher gov't debt. It is indeed a moral situation and one in which the losers who do that sort of thing would like us to think otherwise.
We ended up with loose lending standards because all sorts of special interest groups kept telling everyone that more people needed to own their own homes. They when those unqualified people were given a mortgage, they then complained that they didn't 'understand' what they were getting themselves into and that's where the term predatory lending came into existence. You can't win with those sorts of people because they whine when they can't get approved for a mortgage, and they whine when they do get approved and can't pay it back.
"Sigh. legal mortgages also have an agreement, if you stop paying then X
occurs."
Language is in the mortgage to protect the lender's interest in the event of a default. But language is not in there in order to give the borrower an OPTION to do that. That is what you are presuming here. The mortgage is pretty clear that it is expected that the borrower pay according to the terms of their mortgage and note. There is default language in most business agreements and it isn't the intent of the person giving the money or product that the option exists as a benefit for the other party.
I have a very good grasp of the english language. I've been using it for quite some time.
I'm an underwriter for the federal government who deals with lenders, real estate agents, borrowers, insurance agents and insurance companies everyday. It's what I'm paid to do, just as there are some who are paid to sell homes and some who are paid to give loans for people to purchase homes.
I know what I've said and the ways in which I've said them. I do believe I've been quite clear in this matter.
To the OP, ultimately, it's between your sister and her lender. I hope you can find some peace with that.
To those who have had an issue with my statements? We're just going to have to agree to disagree.
Depends if it's a "Deed of Trust" state, like Cal., Wash., or Florida, or a "Mortgage" state, like Oregon.
I know my parents couldn't get a tenant out for over a year when he filed Chapter 11 protection in California.
If the gov't wouldn't have bailed out Fannie & Freddie then many of these defaults wouldn't be happening. The lender would enforce their deficiency judgment by getting a wage garnishment and it would affect the borrower for the rest of their life.
Do you even realize that many states do NOT have deficiency judgement? And in many states that do have it only a small percentage of cases are actually acted upon? Court cases cost time and money. Banks right now don't have the time or money to deal with the thousands of foreclosures going on. And if someone is in bankruptcy, good luck collecting a wage garnishment! First you have to have a job and in case you haven't noticed, many people are unemployed still.
I have a very good grasp of the english language. I've been using it for quite some time.
I'm an underwriter for the federal government who deals with lenders, real estate agents, borrowers, insurance agents and insurance companies everyday. It's what I'm paid to do, just as there are some who are paid to sell homes and some who are paid to give loans for people to purchase homes.
I know what I've said and the ways in which I've said them. I do believe I've been quite clear in this matter.
To the OP, ultimately, it's between your sister and her lender. I hope you can find some peace with that.
To those who have had an issue with my statements? We're just going to have to agree to disagree.
One of my sisters is way underwater in her home and decides she can't afford to live there anymore. Her plan is to just stop paying her mortgage and keep living there until the Sheriff comes and kicks her out of her home.
In her State there is an average time from stop paying and being kicked out of the house of 300 days. In her twisted logic, that would give her almost a year to save the money she sends in for her mortgage to use on a rental and other expenses.
Don't tell me this is immoral or crazy, I have already told her that. Do you know anyone who has done this and how would she be able to rent an apartment after this?
(She lives alone and declared Chapter 7 Bankruptcy 3 years ago, but was able to keep her house for some reason after her bankruptcy.)
Unfortunately, what you are describing is not uncommon. Everyone gets hurt by this. I know people (pay their mortgage on time) who can't refinance their home, because their home value goes down and due to many short sales in the area. While others that I also know, get their loan balances reduced, their rates reduced by stopping their mortgage payment.
If your sister goes with her plan, she may have a problem finding a desirable apartment, but on the other hand, it seems that most people with good credit would opt for buying, rather than renting, so I'd guess that many (if not most) renters today have less than stellar credit. Your sister may or may not have any issues with renting, depending on the landlord.
I have a problem with those that do this, yet stay in the home, sometimes for YEARS, paying nothing. If you are going to walk away, then walk away from the home and go RENT elsewhere. It is immoral to STAY in the home for YEARS and stock pile money. I guess I am the fool for actually paying off my home.
I feel your pain. It seems that if you are responsible (live within your means, pay off your debts, etc...), you get no help when you need it. But get in debt up to your eyeballs, over extend yourself, and you may have lenders modifying your loan, forgiving debt, etc... Happens more often than you think.
This saying is true... "If you owe a bank $100,000 and you can't pay your loan, YOU have a problem, but if you owe a bank $100,000,000 and you can't pay, now BANK has a problem".
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.
.
