Foreclosures & Delinquencies

Looks like the rumors I have been hearing really are true about alot of these sub prime lenders getting hit hard by its borrowers.

http://http://biz.yahoo.com/ap/070313/late_mortgages.html?.v=11

Well they were high risk, so… high risk is high risk

http://mortgageimplode.com/

Proof once again if you can conceive of it in your brain someone has a website out there somewhere for no matter what it is that runs across that noggin up top.

They aren’t failing because they were high risk.
They are failing because they were taken advantage of by unethical lenders who set them up for failure from the beginning.
When you are so desperate to keep your family off the street that you don’t have any choice but to take a loan at outrageous rates, that pays nothing towards your principle and prevents you from refinancing at lower rates or selling the home to pay off the debt, then you are going to fail. But you never had a chance in the first place.

Not everyone is in a high risk category beause they manage their money poorly. Some have been devastated by accidents, illness, job loss, etc…and they don’t have a choice. They are desperate, which makes them perfect victims.

Actually that site is very accurate as mortgage companies do watch it closely. A lender recently referred me to that site except the website address was lenderimplode.com it leads to the same webpage as mortgageimpode.com

Wendy that was well said. Actually they took advantage of persons who are desperate and set them up with unreasonable ARM loans which in turn will cause them to fail.

I feel bad for all them people who are caught up in this regardless of their financial situations. They would have been better off denying them as opposed to to setting them up.

Wendy, I am sure many people were taken advantage by unscrupulous lenders but many of them did so willingly.

They were subprime borrowers for whatever reason and were given ARMs that looked attractive at the time when realestate was appreciating so quickly.
Many of these borrowers would then later take out some of the equity in their home by refinancing repeatedly. This all worked fine for a time until the market changed.
Now they are left holding a property that is not appreciating or worse declining in value while their ARMs are getting very expensive and their equity is gone. Too often they chose to live off their appreciating homes and are now paying the price during the current correction in the housing market.

There are many “victims” however some where more willing than others.
By choosing to remove the equity in their homes they put both their home and their ability to borrow at risk.

That’s basically what I was trying to say, but I was having a hard time getting it out. :slight_smile:
The killer in these loans is the no sale clause that prevents them from selling the house and paying off the balance. When that clause is included, it is a death knell for the person. Because no matter what the situation, they cannot sell and there is no other way out, so foreclosure is inevitable.

Yes, but not everyone is well educated, or able even to be well informed. Not everyone understands the ins and outs of these things, and don’t know to look out for certain things.

In my situation, I could have made my payments just fine. I did all the right things, and yet the people still found a way to undermine me.

They used the home in a 1031 transfer exchange and never intended to honor the sale. They were spared paying taxes on their new home, then took the home back that they sold me, so they had both homes and avoided taxes.

Wendy,

I was not speaking to your situation only in general terms.

I don’t think the IRS would approve of the 1031 situation you described. I can’t imagine that it would survive an audit.

Oh, I know it was in general. I thought I’d delineated properly, sorry.

I agree. I don’t know if the IRS would catch it on their own, or if they’d need a boost or what. They didn’t even give it time to cool really, they started trying to take it back about 30 days after the transfer.

Well said Wendy, and to make matters worse when you fall behind on your bills late fee’s are added on,then collection fees and that snowball turns into an avalanche. Then everybody ends up at the bottom of the hill. Several years ago I had a bad experience with the money tree, so I refinaced with another lender to get away from the M.T. That lender sold my mortgage, then that lender did the same and guess who bought it. I don’t pity the lenders one bit!

The new American way. It’s not my fault someone took advantage of me. There is nothing worse than someone who doesn’t take responsibility for their own actions.

Like all of these people were forced to sign their name. I guess its the governments fault that they are not educated.

Some divergent perspectives on the issue at hand:

*The majority of those suffering through serious difficulties with their mortgages are borrowers with perfectly acceptable credit histories who somehow got involved in mortgage loan products that were entirely inappropriate for their circumstances. If there is a real value in putting a label on the problem, let’s give the problem the correct label. What we have is a loan product problem.
*
http://www.inman.com/hstory.aspx?ID=62541

AND

*Borrowers are often steered to the wrong mortgage, to a mortgage that is unaffordable, to a refinance that provides them with no net benefit, or to a high-price-loan provider. It would be surprising if a suitability standard were the remedy for every problem.

http://www.inman.com/hstory.aspx?ID=62540


MLarson wrote:

Wel said Michael!!!

GBell wrote:

Actually Greg the government(s), at many levels, have a great deal of responsibility for what has happened here. In addition the RE Industry, specifically RE Agents, Brokers, etc. also share an equal portion of responsibility.

Many of the loan products are not new, such as the ARM. You and I may well understand these only because we deal with the RE industry and have taken the time to read about them. Our governmental agencies are not blind but chose to turn a blind eye as the numbers of these type loans increased. They also failed to enact any laws or legislation to help protect the consumers against these predatory practices. There is no reason to believe our governmental agencies were unaware of the pending disastrous results if the economy took a downturn and these loans started to default.

The RE Agents, brokers, etc. also are partly to blame. A large portion of these defaults are coming from first time homebuyers who have never experienced the entire process of buying and owning a home. One of the first things the agent does is to “Qualify” how much home a person can afford. Even under good economic conditions the LTV ratios they use are, at best, questionable. When these “sub-prime” buyers came and could not afford standard mortgages the RE community then provided information on all of these questionable options for financing. The average person “put their trust” in the RE community to help them understand. Do you honestly believe that every RE Agent/Broker advised their clients against using these fancy, and fatal, financing options? Many of those “sub-prime” borrowers were not highly educated in financial matters and should not have been allowed to borrow in the first place!