It's a two-way street; lenders share blame

There's a lot of responsibility with becoming a homeowner. Two of the biggest are making your monthly mortgage payment and properly maintaining your property - cutting the grass, raking the leaves, etc. A lot of people seem to be finding this out and they don't like it.
Norwalk Reflector Staff
Jul 25, 2010

 

There’s a lot of responsibility with becoming a homeowner. Two of the biggest are making your monthly mortgage payment and properly maintaining your property — cutting the grass, raking the leaves, etc.

A lot of people seem to be finding this out and they don’t like it.

One group is people who signed up for too-good-to-be-true mortgage terms that they are now finding, not surprisingly, turned out to be too good to be true. You’ve heard about them, now that the introductory period is over, principal has kicked in, variable rates have gone up, etc., making the monthly payment in some cases double what it was just two or three years ago. Probably a majority of those who bought into these schemes are now unable to make their payments and are finding themselves on the short end of foreclosure proceedings.

The other group, the one you don’t hear much about, are the mortgage companies who concocted these schemes and pushed and in some cases mislead naïve and unsuspecting consumers into taking on these unsustainable mortgage commitments.

They are the ones now initiating the foreclosure proceedings. However, some of them have run into a roadblock in the form of Federal Judge Christopher Boyko, who last month dismissed a handful of foreclosure lawsuits. Judge Boyko rightfully sent a message to nefarious lenders that if they intend to throw people out of their homes and take ownership, they are going to have to comply with the law.

In a nutshell, the lenders brought suit before getting all of their paperwork in order to prove that they owned the property. The judge threw out the suits because they couldn’t legally prove they had proper title to their properties.

What has been happening is that the lenders have been creating confusion about who holds mortgages of houses in foreclosure so that they can keep on collecting interest on default judgments while not having to take responsibility for maintaining vacant houses. They rush to have people evicted but then delay recording deeds, leaving municipalities (i.e. taxpayers) to board houses up and keep grass and weeds cut.

That stinks.

Plus, in many of the subprime loans, the loans were pooled and repackaged into junk bonds and hedge funds in order for the lender to drive up profits and escape the financial risk associated with the shaky loan. They got sloppy and it’s likely that many won’t even be able to prove they are entitled to property ownership. That’s too bad for them, but in most cases is no more than they deserve for their predatory practices.

As we said, there’s a lot of responsibility associated with homeownership, but it’s a two-way street of responsibility. Lenders, just like borrowers, who failed to act responsibly, deserve whatever happens to them. We’re glad at least one court is going to hold everyone to the letter of the law and we hope others follow suit.

Comments

greed (Anonymous)

It's all about greed. As long as there is money to be made, the heck with anything else! And you can throw our local realtors right in with the banks and mortgage companies. As long as they can make the sale, most could give a rats behind about anything else.

AlterEgo (Anonymous)

Let me start by saying that no lender goes into a mortgage with the hopes that will get to foreclose on a property. It costs a lot of money for the lender to utilize the foreclosure process, and usually results in a huge loss for the lender. That is why lender will bend over backwards if you get behind in your mortgage to help you get current. They stand to make a lot more money if you keep paying your mortgage for the whole 30 years. There are however, mortgage broker who are pushing these subprime loans onto their clients and these are the real culprits. These brokers, who basically just handle the paperwork between you and a lender, get a commision on the sale at time of close and then they are no longer involved. They truly don't care whether or not you can pay your mortgage next month, let alone next year.

Another inaccuracy in this story is that lenders evict the owners, then drag their feet on transferring the titles. This can not happen since until the deed is actually transfered they cannot legally evict anyone from the property. It can take as much as a year from the time someone stops paying a mortgage before they are actually evicted and the Sherrif shows up at the door with the eviction notice.

JEF (Anonymous)

Securitizing mortgage debt is a generally accepted practice and the financial instrument is generally referred to as a collaterized debt obligation (CDO), NOT 'junk bonds.' The overwhelming majority of sub-prime borrowers are making their payments. Liberal politicians cried for lenders to loosen lending standards in order to lend to those who would typically be 'redlined.' Now liberal pols want lending standards tightened and thus will cut out many future qualified borrowers.

JEF (Anonymous)

And yet another situation helps to illustrate the deplorable level of financial ignorance in the U.S. Obviously the Reflector believes that political saviors are the answer in saving people from their own economic stupidity.

re greed (Anonymous)

U R right. Most people would step on grandpa or grandma's hand 2 get a nickel. This money lust is on all levels.

swiss family......

i would love to comment on this and tell you all what i think about these evil lenders, but, instead i think i will let JEF agrue with himself, that is always a great form of entertainment!!! go ahead brother !!!!!

good work JEF (...

Keep it up, start commenting on every story, maybe it'll get swiss to finally shut her pie hole. Promises promises...

Pie Eyed and Bu...

no, swiss. JEF is the only form of intelligence on here. YOUR comments are our only form of entertainment. go ahead brother? 1970 called, they'd like their lingo back.

Richard (Anonymous)

My dad, who was a very practical guy but not a financial or business wizard, gave me the best piece of advice I've ever received. I was nine-years old in 1965 when we were driving by a "City Loan" office in Shelby and I said I could go there and borrow money to buy something. He almost stopped the car and said to me "Son, if you ever want to borrow money, go to a bank. That's what they're in business for and they will be more fair with you than a place like that ever would." The purchase of a house is too big a transaction to use a flashy mortgage lender and their "too good to be true" offers. They are only in it for the fast cash, not the long haul like a bank would be. In the past few years, there were people who bought houses who never should have. They didn't do their homework, didn't look beyond the low payment period at what the total cost of the mortgage would be. Caveat Emptor -- let the buyer beware. Keep the legislature out of it and these sub-prime lenders will dry-up and fade into the darkness if people stopped doing business with them.

JEF (Anonymous)

Richard wrote: 'Caveat Emptor -- let the buyer beware.' Good advice along with the old saw - If it sounds too good to be true it probably is. There will ALWAYS be financial sharks and self-education is the best long-term protection for helping to stay out of their jaws.

T$Robinson.... ...

go ahead JEF please tell us more.... i am not sure that i fully understand what it is that you are trying to tell us, please explain it alittle more clearly...please

just to let u k...

my home was foreclosed on due to my husband getting laid off from mayflower...and we havent paid on it since last jan and the sheriff sale is on it next month so u can live in a home for a while before u have to actually leave until the bank puts it over in their name u can live there

To T$Robinson (...

Like JEF would waste his time on you. Smartass.

Re: Richard (An...

My husband and I went to a bank for our loan, and they sold us to a lender. There is nothing we could do about that. The only other thing was to refiance at another loan mortage, one we get to chose. We are able to make our monthly payments on time, thank God for that.

JEF (Anonymous)

T$Robinson.... wrote: 'go ahead JEF please tell us more....' Since it is not adequately taught in schools, as I previously wrote, financial self-education is most critical. Start with the books, 'Investing for Dummies' and then 'Mutual Funds for Dummies.' 'Basic Economics' by Thomas Sowell would be a good follow-up. And since we're on the topic, 'Home Buying for Dummies' would be an important read. Get back to me after you have completed this assignment and we'll discuss them.

Hey JEF (Anonymous)

you were right any books for "Dummies" is a book for swiss!

I agree (Anonymous)

Hope she picks up Typing for Dummies 101, or Manners for Dummies, Dummies for Dummies...

sally boniva......

shame on these money grubbing lenders, who are taking advantage of a bad situation, and profiting wrongly from the bad state of affairs, it kind of reminds me of the money gouging gas station owners in Norwalk, who are also taking advantage of a bad situation, and making a large profit from their friends and neighbors.. i hope that they have good stores in hell, so these gougers can spend all of that money when they are there!!!

sally boniva,sw...

don't go away mad just go away! Nobody wants to hear your stupid comments. You can post under different names but your ignorance remains the same!

PS (Anonymous)

I forgot Dorothy and gas guzzler.

sally boniva......

speaking of gas prices, i saw on the news where the price of a barrel of gas has gone down , does that mean that the price of gas will come down some?? even in Norwalk?? it will probably go down in all of the surrounding area, but will continue to stay high in Norwalk, is it just me, or has anyone else noticed that whenever i complain about the gas station dealers gouging us for gas , one particular gas station owner seems to do alot of advertising at that same time?? saying that they have fast, and friendly service... but if you notice, the word fair is never mentioned??? just a curious observation???

Legalize Shemp ...

sally boniva=TOOL, swiss family=TOOL, T$Robinson=TOOL, gas guzzler=TOOL, pope ottomus=TOOL, craftsman=TOOL, (oh, the irony)

Here's an obser...

sally boniva is a douche.

lets (Anonymous)

Whats worse bouscay or newton terrace, wait screw it im moving to rustic hills...

Hey cry baby sw...

go to sandusky to get your gas when I went through last night it was $3.03 maybe you can save enough $$$ on gas so you can afford some more bullets for that gun you say you carry concealed without a permit.

sally boniva......

thanks for the info... i was actually at Sam's club in Sandusky yesterday, and their gas was $2.92 so i saved about 20 cents a gallon ... that extra money sure comes in handy, anytime of year.. but especially now, at christmas. Shame on you Norwalk gas station owners for overcharging us deliberately again...like i said before, i don't drive all the way out of town to get cheaper gas, but i do travel outside of Norwalk on a weekly basis, and if i just wait to fill up wherever i am going, the gas is usually cheaper, than what the money grubbing, price gouging, Norwalk gas station owners are charging!!!!

Dear stupid bon...

good for you. just do it and shut up already. who cares what you do. you are a tool douche hag.

funny that swis...

said before she doesnt live in norwalk now she is admitting on here that she does.

Richard (Anonymous)

JEF made a good point about education in financial matters. I've long held the belief that the schools should have a curriculum for EVERY student that includes balancing a checkbook, use of credit cards, obtaining an auto loan and mortgage. Add to that some very basic home maintenance and auto maintenance (how many kids don't even know how to change a tire safely?). Moms and Dads can and should do alot to educate their children in these matters, as well as show the kids how to network with experts in these areas. But if it were conveyed in school, it could be better learned.