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'via Blog this'JS in SD
You can only lock in if your loan has that provision. While many do, often the formula rate at which you can lock in is far higher than the current prevailing interest rate. This leaves many owners stuck because they owe more than the house is worth and can not refinance with a new lender. They can either lock in at the inflated rate or keep rolling the dice with the adjustable rate. Some banks are being a little better about the rates they will offer on the lock in, but that is often entirely at their discretion.
I think that banks should have all the paperwork in order before they can foreclose on your home. The press makes a big deal out of the cases where the banks can not actually prove they own the loan they are foreclosing on. In reality, these do not represent the majority of the cases. In most cases, it is just some lawyer using legal maneuvers and technicalities to try and keep some deadbeat in a home they have not been paying for, often for a year or more, just because the homeowner feels that the bank should modify their loan.
I find it a little disturbing that so many people seem to feel that homeowners have some right to have their loan modified. I think this is a load of crap. These people signed contracts and have no right to demand that the bank modify those contracts just because they have fallen on hard times. Banks may choose to work with a person because they would prefer to keep the homeowner in the house and paying the mortgage than to foreclose. Financially it might make more sense for the bank to lower your interest rate than to foreclose, particularly if you currently owe more than the house is worth. However, the bank has no obligation to make changes and certainly has no obligation to reduce the balance you owe. I recently sold a house and lost a bundle on it. I even had to take cash out of the bank at closing because I owed more than the net I was getting from the sale and the house was in a recourse state. No one is going to give me that money back. I made a bad investment and I paid for it. It is bad enough that people in no recourse states can walk away and stick the bank with the loss, even when they have the money in the bank to make up the shortage. Why should the banks willingly take the hit for your bad investment, particularly when the bank taking the hit is often not the one that made the loan to you in the first place. More often than not, the current holder of the mortgage had nothing to do with the initial deal, so you can no blame them for taking advantage of you or of predatory lending. They simply bought out the mortgage contract from the original lender, or some other intermediate holder, with the expectation of getting paid by the borrower. People need to stop whining and expecting everyone else to pay for their mistakes.
- 11 votes
People need to stop whining and expecting everyone else to pay for their mistakes.
I'd say the banks and other lenders should stop whining and pay for their mistakes.
- 63 votes
"People need to stop whining and expecting everyone else to pay for their mistakes."
I'm sorry...was it the people that "bailed out the banks" or the banks that "bailed out the people"??
- 49 votes
Not if you are underwater in your loan you can't!
If the homeowners are to be held to a responsible level where they need to assess their own culpability in a faulty home-loan system with a questionable paper trail, then the banks surely need to be held to the same. Banks are not supposed to be predators. As a former loan officer, I can attest how easy it is to mislead and screw over trusting people, if that is what your desire is. I never did this, thank God I worked for an institution that actually cared about people, but I know how people just signed whatever I put in front of them because they trusted me. These banks knew what they were doing. They need to take the brunt of the pay-back for the fallout.
- 28 votes
JS in SD needs to get a clue. We bailed the banks out to save they collective behinds now they need to be bending over backwards to help us the consumers.
- 30 votes
Why blame the democrats? They promised me a free home & healthcare. Sarcasm off.
Realistically, all sides have a lot to answer for. Banks for risky investments, consumers for buying more than could realistically afford, Republicans for watering down regulation, Democrats for creating a culture where everyone expects to be bailed out for their own mistakes.
That said, some people legitimately need assistance. Not everyone whose over their heads were at fault. The guy in the article lost his job because the plant shut down, not because he punched out the boss. I don't mind assisting people in that boat. The guys that made money by flipping houses, not so much.
Bottom line: We don't need "more" regulation of banks, but "better" regulations that are then enforced.
- 15 votes
TheRealChris : There's plenty of blame to go around for both parties. No one's hands are clean on this one, just like no one's hands were clean on the S&L crisis.
- 8 votes
That one is easy Chris. They set the stage for this by making legislation that required banks to make stupid loans and then turned around and made legislation to fix it that had no teeth. In other words, the legislation to "fix" the problem was nothing but effectively a non-binding resolution (from the article) that was sold to the public as a panacea. But since your question was actually sarcastic rhetoric, I don't need a reply.
Most of the idealogues on this board will never listen, but seriously, if the Feds require a mortgage broker to count child support as income even if the mother can only expect another 3 months of it and then did the same thing with unemployment etc, what did you expect? These shoddy loans were made at the behest of the government. Just like the rampant entitlement spending today, these loans were nothing but feel-good vote-buying schemes. Sooner or later, the bills must be paid. I'll agree that some consumers were taken advantage of, but the majority either knew or should have known what they were doing. The bottom line is that every single one of those buyers went to a loan closing and signed docs that said they understood. This was done in front of a lawyer that was duty bound to protect the consumer. If so many of these loan closings were fraudulent then why is nobody suing the lawyers hired to protect them? Because they knew they signed and that the lawyer could prove it. If not then some less-than-successful ambulance chaser would have made it his or her mission to sue every lawyer that ever closed a loan. Either way it's hard to find sympathy for consumers that had just as much to do with this mess as the lenders. Neither is innocent. I'm not willing to let the lenders off the hook either, but I can't stomach the Left's position that it was all someone else's fault and those poor consumers just got picked on. Remember the saying: "You can't cheat an honest man." The only reason those folks were hung out to dry is because they thought they themselves were going to get over.
- 3 votes
To JS in South Dakota.People need to keep THEIR GUMS FROM FLAPPING IN THE WIND, and then try walking a mile in these other people shoes.
Especially people like YOU who don't know WHAT THE HELL THEY'RE TALKING ABOUT!
Oh and tmc24,right!It was okay when all those SLIM BAG BANK EXECUTIVES,were salivating in front of everybody for a bail out,these slime bags got it,but when it comes to the average guys like this family they have to Grovel and Beg like dogs, inorder to be able to stay in their own homes.When all the time it was their TAX MONEY,that BAILED OUT THESE BANKER SLIME BLAGS!
Tell me JS in South Dakota, WHERE'S THE JUSTICE IN THAT?
Tax payer bails out Slime Bag Bank and Tax Payer gets thrown out of House ,because he couldn't pay a mortgage to a Slime Bag Bank which was Bail Out by the Home Owners Tax money.So much of his tax payer money, that the amount of money borrowed by the bank, is more than what the Home Owners Mortgage is worth.I believe the Bank owes the home the DIFFERENCE ON HIS HOME.After all the bank BORROWED FROM THE TAX PAYER WHO IS SUPPOSE TO BE A HOME OWNER!
Figure it out JD in South Dakota, and give that brain of yours some exercise!You just might get the idea,THAT HOME OWNERS GOT A ROYAL SCREW JOB BY THESE SLIME BAG BANKS NOT VISE VERSA!Both on toxic mortgages and having their tax money stolen by the Slime Bag banks for their Bail out!
I'm Glad these People won out,but they had to go through HELL in order to do it!
- 9 votes
Jim - while there is no excuse for financial institutions not having all their records in order, their i's dotted and their t's crossed, just keep in mind that not ALL consumers are being "helped". So all the people who are able to make their payments are being forced to pay TWICE, once to bail out the banks, and now to bail out all the troubled homeowners. That's some major BS right there. (And don't try and claim that it isn't so - anything the banks are forced to swallow is being passed on directly to the comsumers.)
- 6 votes
SPAM --
Beware of internet spammers. You don't trust banks, but you'd trust a spammer?
I'm sorry...was it the people that "bailed out the banks" or the banks that "bailed out the people"??
and
We bailed the banks out to save they collective behinds now they need to be bending over backwards to help us the consumers.
Yes, I paid to bail out the banks. No, I don't owe a mortgage (or have any debt). Why should I also end up paying higher banking costs to cover the people who borrowed money and now can't/won't pay it back?
If the banks think it's in their best interests to reduce payments, that's fine. If not, they should foreclose. No government subsidies or force required or appropriate.
Some of bailing out the banks was essential -- our entire financial house of cards (fractional reserve system etc) was on the verge of collapsing. It was not done well, but something was necessary. It was done to save the system, not to benefit specific individuals who paid more for a house than they should have or took money out of their houses in an inflated assessment refi and spent that money on something else (i.e., using their house as an ATM speculating on the future value of the house -- just like an commodity trader).
A lot (actually, all) of my investments took hits due to the financial meltdown -- and I don't expect the government to cover those losses or force a private party/business to do so. My rent is increasing significantly due to the increased demand for rentals caused by people putting off buying a house (a good decision -- why buy into a declining asset) - and I don't expect the government to cover the increased rent or force a private party/business to do so.
Why do the homesquatters keep whining? Rent a place to live and mail the keys to the bank if you're underwater and don't want to make the payments. If you're underwater now and the bank won't reduce the principal (which they rarely do), you will probably still be underwater (probably more so when accounting for inflation) in ten years. It would likely be wise to walk away from the table and cut your losses.
- 2 votes
Nothing like using shoddy paperwork to get out of contractual obligations.
Funny how the same people who complain about lack of documentation and how it is "proof banks don't care" also count on those mistakes to get themselves out of their obligations. If banks had done everything "by the book" and crossed every T these same people would be SOL today.
2008 - 2011 "banks used robosigners and it is unfair...."
2012 "thank goodness banks used robo-signers, it gave me a loophole out of my obligations..."
- 3 votes
pjam09 - you're exactly right. This is the way things work today, you make the current situation fit the current needs. But I have no sympathy for the banks who gave away their solid, proven lending criteria, for government backing and doing things the "government way", and I have no sympathy for anyone who was dumb enough to take out a 30 year, 5% loan on an over-priced home with zero down, with a typical "job guarantee" (which is nothing). Most of these people who are/were underwater, were underwater the day they signed the note. And NO amount of government intervention is going to EVER fix that situation.
- 2 votes
pjam09,
Nothing like using shoddy paperwork to get out of contractual obligations.
That's why you take the time to draw up a contract based on matters of fact and protect your own interests. Nobody held a gun to the bank's head and forced them to sign crappy contracts.
When a bank uses your mistakes against you, they're just exercising their rights as drawn up in the contract. But when you use the bank's mistakes against them, you're irresponsible? Does that make sense? The banks didn't protect their own interests. The banks were more interested in a quick buck. They gambled and lost. Forgive me if I don't cry for them.
- 11 votes
After reading this article I'm convinced that anyone who still thinks that ALL or even MOST of the people who are underwater with their mortgage are lazy freeloading deatbeats who irresponsibly bought more home than they could afford has their head in the sand.
- 2 votes
There are a lot of different scenarios in play here. This article referred to a couple who had tried repeatedly and failed to get any help from the bank BEFORE things got to foreclosure. Those people need help. If they find out thru an attorney they can get terms redone, more power to them! Those folks that signed on the line for a McMansion when they could only afford a McNugget and did so with the bank's blessing, well, shame on BOTH, but the bank shouldn't have offered and agreed in the first place. It is, after all, their responsibility to determine acceptable risk when lending. It's the buyers responsibility to pay for it, too, but you show me someone who won't take what is offered if given the chance whether they should or not!
I do not fault the bank if the buyer squats and backs out of their obligation because they don't wanna pay and the bank goes after them. I DO fault the bank if they file shoddy paperwork, refuse to assist (when they tell you to call before things get bad), or foreclose before they legally should. Right now, all variations are occurring with no end in sight. Don't lump everyone in the same situation.
If you've tried to refinance lately, you should know that it takes FOREVER to get the bank to do anything. They are simply swamped. Now there is an industry that could use more jobs! Loan officers! ;)
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