I wouldn’t be interested in letting the banks off the hook on this but I’m not interested in letting homeowners, who knew they purchased above their means, off the hook either. The fault goes both ways on this.
This isn’t necessarily addressing only the people who got into loans they couldn’t afford. What about the people who are making payments but now can’t refinance because they owe more than what the house is worth?! Why punish them for being responsible when it’s the banks that created the entire situation.
The banks created the entire situation? I see, the old Flip Wilson defense of “The devil made me do it” with the banks acting as the devil, relieves the barrower of any responsibility for repayment of the actual amount of money they asked for.
I agree that this is also about people who are making payments but can’t refinance because they owe more than what the house is worth…..If at the time purchased,they could afford that house and even put down at closing more than the bank required, what happens to those people who had a “Life Style Change” because one of the two on the mortgage lost their job because of the terrible economy and companies closing or consolidating? Who will help them? The Obama Plan agreed to help 4.5 million of those in this position,instead it barely helped 300,000 of those that could afford their home when they purchased it and then a Life Style change such as the loss of a job causing a 55% drop in monthly income hits them.
I know this first hand because my adult son in New York, applied for the refinance option two years ago after the loss of the 55% monthly income due to to a job loss. He met with his mortgage lender, BANK OF AMERICA’ at the Nassau Colloseum on Long Island to apply for refinancing to help him continue to make his mortgage payments. After a wait of 5 hours with every document in order and proof of income, bills, “perfect credit score”, he was declined as he had not yet missed any payments. Knowing the doom was coming with 55% less income, raise in property taxes to spite, lower house value???, and mounting bills including college tuition, he was declined. He asked them to consider that he knew what was to come, so why couldn’t they refinance now to be sure they would not have to foreclose and to insure his perfect credit rating? Everytime he followed up,with exhausting “go no where” phone calls he was told there were no records of his applicatin, he would have to reapply, which he did,and still no answer. After two years of my son working 80 to 100 hours per week,with a 4 hour commute, my son is close to a nervous breakdown. His doctor told him he had abused his tired body. Sufferring from major back problems, his severe pain turned to depression. His step daughter could not return to community college this fall, the house was in need of repairs he could not afford, his parnter unable to find a job that would pay the difference from what he earned, he had to stay home from work because of severe depression. The last few months have been a nightmare for me watching my son, an honest, very hard working young man, dedicated to his family and his career, fall apart. The depression stems from his inabiity to continue working so many hours and knowing the house will go into forclosure as he could not even earn the regular 40 hour per week salary. His partner, continues to take courses to bring in as much as she could. However, her new career is commision bases and with the economy the way it is, no one is buying life insurance policies. As a troubled Mother, who should have retired last year, I continue to work to help at least put food on the table.
NOW BANK OF AMERICA…………..LISTEN TO THE KIND OF PEOPLE WHO HAVE MADE THIS NATION WITH THEIR HARD WORK AND PRIDE.
Thank you and well said! This is also the story of my life today compared to 10 years ago. Oh, and our mortgage is with Bank of America too. How very sad.
October 19, 2011 at 9:56 pm
Former Status Quo says:
Like or Dislike:
0
0
The reason they want to refinance is because they bought too much house thinking they could flip it in two years and make 20%. On top of that they were using a HELOC as an ATM for cars, boats, and vacations. No sympathy Jill. The lending standards may have been lax but the personal accountability is just as bad if not worse.
So, the banks who pay specialists millions and millions to set this scheme up in the most profitable way possible, who pay appraisers to inflate that bubble and then who contract with the homeowner that their house IS worth what they are paying/lending are equal to ma and pa who hear from their “trusted advisor”, we ran the numbers and you qualify?
I’m sorry – it’s not close to equal. the banks expanded the bubble and defined the values. Then behind everyone’s backs bet against the loans (winning when ma and pa default). Then, when the whole thing exploded other banks bought said loans for ten cents on the dollar, so they profit when someone forecloses. This whole thing is crazy and to blame the consumer is ridiculous.
Funny a kid who steals three packs of gum can get sent away for life but no one went to jail for any of this…….
Have you never made a purchase that you later regretted making?
Here are these borowers, going into Countrywide and other mortgage lenders asking how much they can borrow, and what they get is a sales pitch convincing them that they can afford the loan because, maybe the payments are lower in teh first few years, and they get higher later, but don’t worry because you’ll be geting a raise like you do every year….
Do the borrowers shoulder some of the blame? Sure they do. But if banks and mortgage companies were pushing products they knew would never get repaid, but they used their sales skills to convince poeple that they could afford it, then I place the majority of the blame on the sales people.
Keep in mind that when people took out those loans, the economy was rocking along in fine shape, unemployment was low, housing prices were rising AND ALWAYS HAD RISEN BEFORE! No one ever expected the bubble to burst. No one expected the markets to crash and unemployment to skyrocket. At the time people took out those loans, it seemed reasonable to think they could pay them back.
Above their means, really? I guess the housing bubble didn’t burst in SWFL and your home is worth as much or more than it was before the economy went bust.
I know I’ve been lucky, but there are thousands of families who are stuck, and were honest & upfront in their purchases – at the time.
SWFL along with Las Vegas has been at the top of the list on foreclosures. So yes we know about the “bubble”. Many people purchased homes with little or nothing down with an income level that could not support their purchase. Additionally, they had a credit level that would have never been acceptable for a home purchase in prior years. Is it the banks’ fault for loaning these people money? Absolutely. Did this people purchase above their means? Absolutely. So some people are back renting, the same place they were before the bubble enabled them to buy.
I think your comment is a little disingenuous. I purchased a property what at face value is worth ~ 1/3rd less than when I purchased the home. I’m one of the lucky ones – I make enough income that in the long run, I am in no risk of not being able to pay off this loan. In fact, my gross wages are roughly equal to the value of the home.
But the value of my property has dropped significantly – not because of anything I’ve done but because of the economics that have hit the entire real estate industry. True some people purchased homes they shouldn’t have, but there are others like myself who purchased homes well within our means only to see our equity get trampled from the fault of others. Its also important to note that several mortgage lenders used very aggressive marketing techniques to put people into loans that exacerbated risk – versus minimizing it. With documents hundreds of pages think, it is likely that many consumers had no idea what they were signing up for?
Unfortunately, we may not have seen the bottom yet and folks like me who have never missed a payment continue to be penalized because of the drop in equity. This has forced me to spend my note down faster vs. spending money into the economy which would create demand and jobs.
To SWFL—I agreee 100%, here comes the, but, what about the folks who had a job, lost the job and than got evicted without due process. Seems to me that we have a law that says something about due process. With the robo signing and the missing mortgage papers due process is missing.
Thousands and Thousands of families would like to keep thier homes, its a American dream, in fact its essentuial to our soceity as awhole, but how do you do that if you owe more than its worth? assuming you didnt cash out the equity for a vacation and or luxury car.
I think the banking industry should be forced to reevaluate the current devaluation of all homes and allow those whom want to keep thier homes the opportunity to do so.
The math on a $200,000.00 mtg.@ 4.75% still shows the lender making money! no matter how you see it.
P.S. Last time I checked, the Banks are lending our money not thiers anyway.
Bottom line: If the American dream fades away, So will the Banks! along with the entire society.
Perhaps I’m either forgetful or misinformed, but I don’t ever recall such a breathtaking scope of immunity being retroactively conferred on past criminal acts. I’m referring, of course, to the systemic process of fraudulently creating foreclosure documents, which the article refers to as “shortcuts.” As a matter of public policy, regardless of the pragmatic economic considerations, it is toxic to grant a blanket forgiveness of crimes to an entire industry, including immunity of prosecution for the erstwhile individual criminals.
I have sympathy for those who have lost jobs and subsequently lost homes. However, for those that borrowed too much, had little to no downpayment and now are underwater due to falling prices, you are not due a refinancing, or loan modification. You took out that debt obligation of your own free will. No one forced you to sign the loan, no one forced you to spend that money or borrow that much. The borrowers are not all innocent people just taken advantage of. Many are complicit with the mortgage brokers in borrowing on the hopes of rising prices. Look how many jumped into the overvalued California market in hopes of turning a profit when they sold their overpriced house a few years later? If you buy a car, drive it off the lot and it loses 10 grand that day, like so many do, are you responsible for paying your car payment, or should they refinance you for the new diminished value of the car because you are now underwater? Same principle, different posession. Buying a home and taking on a mortgage is a risk, not a right. You are not guaranteed an increase in value. It is wrong to absolve all these borrowers because the market changed and they lost money. That’s part of the risk in buying. Next it will be forgive all the student loan debt because it’s just too much and hard to get a job when you are a new grad, then it will be forgive the credit card debt or refinance at lower interest because it was confusing when I applied for that card, and on and on. People must be responsible for their actions.
I’m in CA. the mortgage contracts are very clear and the corporations made these contracts when holding all of the leverage.
the contract says, I’m loaning you $xx for this house. If you pay all the $$ back at the end of the term, you get the house. If you default, we take the house.
Nowhere in the contract does it say – if you default you are morally bankrupt, it just says we’ll take the house.
If you take any business class, they teach you that sometimes taking the default penalty makes good business sense. Business does it all the time.
So why should we care if people default? Frankly, the only reason we should push for the re-finance option is for market stability. Homeowners would be better off taking the penalty and walking.
Banks made loans they had no business making – putting a lot of hardworking people in almost over their head by pushing, pushing, pushing and making money. Banks then sold loans and made lots of money. Banks got bailed out and made money. Banks robo forclosed and made money (foreclosure insurance, etc.). (meanwhile…try to get a loan these days). Banks now want immunity from fraud. Wait..FRAUD. Its a big joke. If you have been a part of the whole ordeal you know as a homeowner you are going to get screwed because everything else has just been cheap talk. HAMP and all that a total waste of energy, too. Can’t refinance – can’t sell. Banks changed the climate of homeownership and worth – not the homeowner. Many have lost their life savings in their underwater home.
i keep reading where people say they bought a house as an investment, and they are complaining because they are now upside down on their ‘investment’. if the government will help these people and their ‘investment’, they should help me on my ‘investments’ too! you can tell it getting close to election time and promises flow like water.
STOP THIS MADNESS.
http://www.rollingstone.com/politics/blogs/taibblog/attorneys-general-settlement-the-next-big-bank-bailout-20111005
Paste that in your browser and read it – California and New York have pulled out of the deal and the other 48 states need to pull out.
I wouldn’t be interested in letting the banks off the hook on this but I’m not interested in letting homeowners, who knew they purchased above their means, off the hook either. The fault goes both ways on this.
This isn’t necessarily addressing only the people who got into loans they couldn’t afford. What about the people who are making payments but now can’t refinance because they owe more than what the house is worth?! Why punish them for being responsible when it’s the banks that created the entire situation.
The banks created the entire situation? I see, the old Flip Wilson defense of “The devil made me do it” with the banks acting as the devil, relieves the barrower of any responsibility for repayment of the actual amount of money they asked for.
I agree that this is also about people who are making payments but can’t refinance because they owe more than what the house is worth…..If at the time purchased,they could afford that house and even put down at closing more than the bank required, what happens to those people who had a “Life Style Change” because one of the two on the mortgage lost their job because of the terrible economy and companies closing or consolidating? Who will help them? The Obama Plan agreed to help 4.5 million of those in this position,instead it barely helped 300,000 of those that could afford their home when they purchased it and then a Life Style change such as the loss of a job causing a 55% drop in monthly income hits them.
I know this first hand because my adult son in New York, applied for the refinance option two years ago after the loss of the 55% monthly income due to to a job loss. He met with his mortgage lender, BANK OF AMERICA’ at the Nassau Colloseum on Long Island to apply for refinancing to help him continue to make his mortgage payments. After a wait of 5 hours with every document in order and proof of income, bills, “perfect credit score”, he was declined as he had not yet missed any payments. Knowing the doom was coming with 55% less income, raise in property taxes to spite, lower house value???, and mounting bills including college tuition, he was declined. He asked them to consider that he knew what was to come, so why couldn’t they refinance now to be sure they would not have to foreclose and to insure his perfect credit rating? Everytime he followed up,with exhausting “go no where” phone calls he was told there were no records of his applicatin, he would have to reapply, which he did,and still no answer. After two years of my son working 80 to 100 hours per week,with a 4 hour commute, my son is close to a nervous breakdown. His doctor told him he had abused his tired body. Sufferring from major back problems, his severe pain turned to depression. His step daughter could not return to community college this fall, the house was in need of repairs he could not afford, his parnter unable to find a job that would pay the difference from what he earned, he had to stay home from work because of severe depression. The last few months have been a nightmare for me watching my son, an honest, very hard working young man, dedicated to his family and his career, fall apart. The depression stems from his inabiity to continue working so many hours and knowing the house will go into forclosure as he could not even earn the regular 40 hour per week salary. His partner, continues to take courses to bring in as much as she could. However, her new career is commision bases and with the economy the way it is, no one is buying life insurance policies. As a troubled Mother, who should have retired last year, I continue to work to help at least put food on the table.
NOW BANK OF AMERICA…………..LISTEN TO THE KIND OF PEOPLE WHO HAVE MADE THIS NATION WITH THEIR HARD WORK AND PRIDE.
Thank you and well said! This is also the story of my life today compared to 10 years ago. Oh, and our mortgage is with Bank of America too. How very sad.
The reason they want to refinance is because they bought too much house thinking they could flip it in two years and make 20%. On top of that they were using a HELOC as an ATM for cars, boats, and vacations. No sympathy Jill. The lending standards may have been lax but the personal accountability is just as bad if not worse.
So, the banks who pay specialists millions and millions to set this scheme up in the most profitable way possible, who pay appraisers to inflate that bubble and then who contract with the homeowner that their house IS worth what they are paying/lending are equal to ma and pa who hear from their “trusted advisor”, we ran the numbers and you qualify?
I’m sorry – it’s not close to equal. the banks expanded the bubble and defined the values. Then behind everyone’s backs bet against the loans (winning when ma and pa default). Then, when the whole thing exploded other banks bought said loans for ten cents on the dollar, so they profit when someone forecloses. This whole thing is crazy and to blame the consumer is ridiculous.
Funny a kid who steals three packs of gum can get sent away for life but no one went to jail for any of this…….
Please
Have you never made a purchase that you later regretted making?
Here are these borowers, going into Countrywide and other mortgage lenders asking how much they can borrow, and what they get is a sales pitch convincing them that they can afford the loan because, maybe the payments are lower in teh first few years, and they get higher later, but don’t worry because you’ll be geting a raise like you do every year….
Do the borrowers shoulder some of the blame? Sure they do. But if banks and mortgage companies were pushing products they knew would never get repaid, but they used their sales skills to convince poeple that they could afford it, then I place the majority of the blame on the sales people.
Keep in mind that when people took out those loans, the economy was rocking along in fine shape, unemployment was low, housing prices were rising AND ALWAYS HAD RISEN BEFORE! No one ever expected the bubble to burst. No one expected the markets to crash and unemployment to skyrocket. At the time people took out those loans, it seemed reasonable to think they could pay them back.
Hindsight is 20-20.
Above their means, really? I guess the housing bubble didn’t burst in SWFL and your home is worth as much or more than it was before the economy went bust.
I know I’ve been lucky, but there are thousands of families who are stuck, and were honest & upfront in their purchases – at the time.
SWFL along with Las Vegas has been at the top of the list on foreclosures. So yes we know about the “bubble”. Many people purchased homes with little or nothing down with an income level that could not support their purchase. Additionally, they had a credit level that would have never been acceptable for a home purchase in prior years. Is it the banks’ fault for loaning these people money? Absolutely. Did this people purchase above their means? Absolutely. So some people are back renting, the same place they were before the bubble enabled them to buy.
I think your comment is a little disingenuous. I purchased a property what at face value is worth ~ 1/3rd less than when I purchased the home. I’m one of the lucky ones – I make enough income that in the long run, I am in no risk of not being able to pay off this loan. In fact, my gross wages are roughly equal to the value of the home.
But the value of my property has dropped significantly – not because of anything I’ve done but because of the economics that have hit the entire real estate industry. True some people purchased homes they shouldn’t have, but there are others like myself who purchased homes well within our means only to see our equity get trampled from the fault of others. Its also important to note that several mortgage lenders used very aggressive marketing techniques to put people into loans that exacerbated risk – versus minimizing it. With documents hundreds of pages think, it is likely that many consumers had no idea what they were signing up for?
Unfortunately, we may not have seen the bottom yet and folks like me who have never missed a payment continue to be penalized because of the drop in equity. This has forced me to spend my note down faster vs. spending money into the economy which would create demand and jobs.
To SWFL—I agreee 100%, here comes the, but, what about the folks who had a job, lost the job and than got evicted without due process. Seems to me that we have a law that says something about due process. With the robo signing and the missing mortgage papers due process is missing.
Thousands and Thousands of families would like to keep thier homes, its a American dream, in fact its essentuial to our soceity as awhole, but how do you do that if you owe more than its worth? assuming you didnt cash out the equity for a vacation and or luxury car.
I think the banking industry should be forced to reevaluate the current devaluation of all homes and allow those whom want to keep thier homes the opportunity to do so.
The math on a $200,000.00 mtg.@ 4.75% still shows the lender making money! no matter how you see it.
P.S. Last time I checked, the Banks are lending our money not thiers anyway.
Bottom line: If the American dream fades away, So will the Banks! along with the entire society.
Perhaps I’m either forgetful or misinformed, but I don’t ever recall such a breathtaking scope of immunity being retroactively conferred on past criminal acts. I’m referring, of course, to the systemic process of fraudulently creating foreclosure documents, which the article refers to as “shortcuts.” As a matter of public policy, regardless of the pragmatic economic considerations, it is toxic to grant a blanket forgiveness of crimes to an entire industry, including immunity of prosecution for the erstwhile individual criminals.
I have sympathy for those who have lost jobs and subsequently lost homes. However, for those that borrowed too much, had little to no downpayment and now are underwater due to falling prices, you are not due a refinancing, or loan modification. You took out that debt obligation of your own free will. No one forced you to sign the loan, no one forced you to spend that money or borrow that much. The borrowers are not all innocent people just taken advantage of. Many are complicit with the mortgage brokers in borrowing on the hopes of rising prices. Look how many jumped into the overvalued California market in hopes of turning a profit when they sold their overpriced house a few years later? If you buy a car, drive it off the lot and it loses 10 grand that day, like so many do, are you responsible for paying your car payment, or should they refinance you for the new diminished value of the car because you are now underwater? Same principle, different posession. Buying a home and taking on a mortgage is a risk, not a right. You are not guaranteed an increase in value. It is wrong to absolve all these borrowers because the market changed and they lost money. That’s part of the risk in buying. Next it will be forgive all the student loan debt because it’s just too much and hard to get a job when you are a new grad, then it will be forgive the credit card debt or refinance at lower interest because it was confusing when I applied for that card, and on and on. People must be responsible for their actions.
Actually –
I’m in CA. the mortgage contracts are very clear and the corporations made these contracts when holding all of the leverage.
the contract says, I’m loaning you $xx for this house. If you pay all the $$ back at the end of the term, you get the house. If you default, we take the house.
Nowhere in the contract does it say – if you default you are morally bankrupt, it just says we’ll take the house.
If you take any business class, they teach you that sometimes taking the default penalty makes good business sense. Business does it all the time.
So why should we care if people default? Frankly, the only reason we should push for the re-finance option is for market stability. Homeowners would be better off taking the penalty and walking.
Banks made loans they had no business making – putting a lot of hardworking people in almost over their head by pushing, pushing, pushing and making money. Banks then sold loans and made lots of money. Banks got bailed out and made money. Banks robo forclosed and made money (foreclosure insurance, etc.). (meanwhile…try to get a loan these days). Banks now want immunity from fraud. Wait..FRAUD. Its a big joke. If you have been a part of the whole ordeal you know as a homeowner you are going to get screwed because everything else has just been cheap talk. HAMP and all that a total waste of energy, too. Can’t refinance – can’t sell. Banks changed the climate of homeownership and worth – not the homeowner. Many have lost their life savings in their underwater home.
i keep reading where people say they bought a house as an investment, and they are complaining because they are now upside down on their ‘investment’. if the government will help these people and their ‘investment’, they should help me on my ‘investments’ too! you can tell it getting close to election time and promises flow like water.