Disturbing trend

"What I cant understand is when is our government going to step in and do something about this predatory lending?"

When we speak louder than the mortgage industry.


"I truly think this was enacted to correspond to the tougher bankruptcy laws that was enforced last year."

I disagree. When the housing market was on fire during the last couple of years, everyone wanted to make money...sellers, mortgage companies, and buyers wanted to get in before they were priced out of the market. This meant that unscrupulous and irresponsible lenders loosened their underwriting requirements. People that wouldn't have been approved for any mortgage in the past now were being offered loans that they really shouldn't have qualified for. The lenders could be in a lot of trouble too-foreclosures aren't good for them either.

"Maybe instead of buying another home soon I will just keep renting and wait this one out."

You and me both

Quote:

Moringstar, I appreciate your opinion. Guest this is what is going to happen to a lot of people. Now these mortgage companies have you by the throat. I have to disagree with Morningstar I think there is a tie in to why they started the tougher laws last year. People could pay these mortgages if they could get a decent break. The guy that bought my house will be paying 15 percent interest thats just CRAZY!! They can expect many many foreclosures I hate to say. People already struggle in this country without adding this to it. This website is evidence of that. Like I have said before the majority of people on here are good hard-working honest people that just for one reason or another fell behind. Like in the instance of payday loans if somebody would do a poll I bet people took the loans to pay bills or buy food not for pleasure. Thats just my opinion and I welcome others. KYSIDE38

kyside,I also agree with you mortgage companies need tighter regulation.When hurricane katrina and rita hit my state,a lot of people lost everything. I almost told my company to come get my home because they didn't want to sign off on the insurance money.When they realized that my wife and I were dead serious,they couldn't get the money to us fast enough.
I had neighbors that had to sue mortgage companies to accomplish the same thing and I had to get our state insurance commissioner onboard my case before they even took notice of me. After going thru all that I would be in total agreement with you.I have paid on my home for ten years never late and that did not mean anything to these people when I was trying to get my home repaired before the mold ate everything up!

I was so anxious to get out of living in my parents' basement (concrete floor, cinderblock walls, leaks when it rains), that I called one of those companies that advertises on signs in front of houses and on streetcorners. "No money down! Own a home now!" Big mistake.

I should have known when the mortgage broker was a no-show for our first meeting, then called to ask where I was when SHE showed up an hour late (and dressed in a sweatsuit), and told me that I was mistaken on the meeting time; then over the course of 4 months, was almost impossible to contact, wouldn't return calls; her pat response to my irritation or anger at her unprofessional manner was "let's pray"; her loan processor sent my mortgage package to no less than 10 lenders in an effort to get it funded; I was told not to reveal that I have children if the lender called; and the final straw - when the mortgage broker assured me all my closing costs would be included in the mortgage, my insurance and taxes would be included, and my payment would be no more than I could afford...then she showed up at the closing and tried to pay the closing costs with her own personal check. The title person looked at her like she was nuts, and pretty much told her so. The broker threw a fit...a literal, stomping out of the office, shouting fit. I should have run - fast. But, because I was so desperate, and wanted so badly to believe that this was going to work, I didn't.

I ended up in a mortgage with an extremely high interest rate, the taxes and insurance NOT included, and a payment that was $150 higher per month than what I told them I could afford. In an effort to make it, I foolishly took out a few payday loans. And we all know where that gets you. 7 months after buying my house and moving in, I had to file Chapter 13 Bankruptcy in order to keep it. I was humiliated and very angry at myself for allowing it to happen - I saw the warning signs all along the way during the process of purchasing the house, and ignored them because I was so desperate to buy a home.

Lesson learned. I plan to buy another home in the future, but it will be a long time before I am able to, and when I do, it will be with much more care and consideration. :(

15 PERCENT :shock: :shock: :shock:
I had no idea the rates reached that high...that is insane! The highest I've ever heard of was a little over 10%-not that it isn't a rip, either.

There is an internet site that offers all kinds of information on mortgages, predatory lending and anti-predatory lending and how to be mortgage free. It also has a forum where you can ask questions. PM me if anyone wants the name.

kyside---its the same site I referred you to.

When I applied for our car loan, I bet I had 30 mortgage companies calling me. Not one could get me a better rate.

I can tell you that the current administration will NEVER do anything about this increasing problem, because as the President has said before, his constituency is the "haves and the have-mores". This is just another classic case of the rich getting richer and the poor getting poorer on George W's watch--with the Middle Class being totally eliminated. Just my two cents...

In January of this year, new mortgage laws went into effect in Ohio. I can't recite them but it has something to do with this kind of predatory lending. I really don't know if it has anything to do with the new bankruptcy laws because this type of lending has been around a lot longer than that. I read an article online a few days ago that was more compassionate to the mortgage lenders doing this type of thing. I disagree with that because so many people want a home. It's hard when you have blemishes on your credit report to get a decent mortage interest rate or even get a decent mortgage. Our apr goes into effect next month but our payment is going up too terribly much. It caps at 12 percent though which is two years down the road. We hope to refinance next year. If we can't, we'll just have to stick it out until we can. That's why we're focused on getting our credit reports cleaned up. It really is a sad situation for so many people.

Mishele, I totally agree. One little blemish this day and time and you are ruined. From everything to a mortgage to a job to car insurance etc. No wonder the payday loans get people. KS I also toatlly agree with you. The rich are getting richer and LORD help us middle class people. KYSIDE38

What I don't get is that many of these sub prime lenders refuse to work with people when they start to get in trouble and seek assistance in responsible handling their debts (for example Chase Won't accept partial payments unless your on a formal repayment plan, and if you are on a formal repayment plan they will continue to report you if your late, they will not stop foreclosure proceedings if you have gone that far, and they will not stop assessing fees. So You ask your self, what exactly is the benefit of taking them up on the repayment plan? the effects on me are the same whether I do it their way or I just continue to pay them 30 days late... go figure.. seems like it would be in many of these lenders best interests to actively work with their customers rather than force them into default.

LCW, I couldnt agree with you more. I did learn some new facts that might help you. I reveived some PM about this . Seems that Ohio for sure and I think MA. These states are coming up with plans to keep people out of foreclosure. I think before it is said and done Congress will have to do something. We all thought we were alone. Folks I heard the other day its over 20 percent of mortgages in the US SUBPRIME!!! Seems like we are not the only ones in trouble. I agree with LCW if they would only work with you there would not be so many defaults. KYSIDE38

I read a news article where there a few sub-prime lenders who are trying to prevent fore-closures. They have developed departments called "the mod-squad", their sole purpose is to contact the home owners who are facing foreclosure and to re-modify their loans so they can keep their homes and stop foreclosure, or prevent foreclosure. And from what I read the government is watching the outcome of the "mod-squads" to see what their success rate is in preventing foreclosures. The lenders said that this is a better alternative, they don't lose money on the foreclosure and the owner doesn't lose their home. This is a new thing and recently started so their aren't any numbers on the success rate.

The article stated that they do not operate as collectors, the "mod squad" worker will only be in contact with 3 home owners in a day working out a solution where as a collector is in contact with many more than 3 people in one day.

The mod squad does indeed sound like a better alternative than a typical collector, who as we know can contact waaayy more than three people through a direct dialer system. It also sounds like these people are working to change lives in a positive manner.

The banks are losing money also. It was a very good article I read on MSN. I am going to try and find it again and post the link to it. It sounded like a good solution and so far the few sub-prime lenders doing this are having success. They are also being watched closely by the government and other lenders who are interested in their new program. I liked the name "Mod-Squad".

Today on my Yahoo's news page what appears but the six steps to avoid foreclosure. Lists Wells Fargo as one of the companies that helps. Yeah Right thats all they threaten is foreclosure. I am just so thankful I sold my house and got rid of those vultures. KYSIDE38

I saw a report the other night, Nightline I believe. That 15 to 20% was in the year 2000. It is over 40% now which are subprime. Lenders such as Countrywide and others are now reaping what they've sown, and on the edge of bankruptcy.

Law Student, Thanks so much for that info. Wow 40 percent. Makes you wonder what is going to happen with this housing market. YIKES!!! KYSIDE38

Just to keep this topic going I saw on the nightly news tonight that the foreclosures are on the rise. With all the new cost that people are enduring they just cant swing it anymore. Lawstudent was exactly right. 40 percent subprime and stuck there. The mortgage people are tighting the rules. More money down, higher credit scores, to qualify for a loan. So this leaves people stuck in subprime lending they cannot refinance. This is scary and there is going to be alot of empty houses in this country. KYSIDE38

It all started in California more than five years ago, when borrowers were offered mortgages on which payments only went toward interests and in five years from then, payments would greatly increase, and start being applied to the principle. At the same time, many mortgages were offered (to people who couldn't really afford it) with easy terms, and many times, nothing down. Here we are five years later, and mortgage companies are getting what they foolishly deserve.

I see more and more homes up for sale in my area due to foreclosure. I live in a small, farming community and it's hard for people to keep up with these outrageous interest rates. My hubby and I are in the process of refinancing our home through a local bank. It looks like it will take a little bit of time but at least we will be done with our vulture of a mortgage company. :evil:

A few years ago my neighborhood had foreclosures popping up every morning you leave for work. Families were literally packing up in the middle of night and abandoning their homes. It is one of the Dominion/MI subdivisions where people got ripped off on those 2/1 Buy Down Mortgages. Thankfully, I was able to refinance before my monthly mortgage payment went up $400! Those companies were never truthful to the borrowers about how much their payments would really go up after that first year in the home. Like I said, I was lucky, and was able to refinance and keep my mortgage payment from skyrocketing!

And all of those foreclosures have hurt my home's value. Luckily over the past 18 months the foreclosures have filled up, and I'm hoping to see the home's value go back up. I believe that another subdivision settled a lawsuit with these companies and borrowers received a settlement for the lending and deceptive practices of these home builders.

Steelers there are lawsuits popping up left and right on these subprime companies and I say well and good. They did not disclose what they were supposed to to the borrower and I think they should have to pay up. Kyside38

I almost got screwed by them. But I soon realized after a friend went over the papers with me what was about to happen. I was soooo lucky and I got in on an awesome rate, I had two brokers, a husband and wife who went above and beyond to help me and get me that rate. I was more fortunate than those who just sat there and did not think they would need to refinance to get away from the huge mortgage payment that was about to hit them. And alot of them never should qualified for such expensive homes to begin with, they should've qualified for a lower mortgage. They truly were taken advantage of.

It just goes to show, if it sounds too good to be true, it probably is.........

You are right Kscornell, I saw neighbors moving into $200,000 new build homes making less than $30,000/yr! And you guessed it, they were foreclosed on with in that first year once their monthly payment went to over $1200/mo. I'm just greatful I had a friend to help me go over my papers well and gave me the good advice to refinance before the increase hit me, and I got a great rate. I really don't know what some of these people were thinking when they got into a house that was that high priced.

OMG I could live in the millonaire section her for that. The average price for a good home here is about 80000. Roadwarrior once told me I couldnt live in a box in Ma. for that. LOL Kyside38

I bet you could do wonders decorating that box. LOL. I believe him too! I bet even $200,000 wouldn't get you much there.