Foreclosures and Irresponsible Home THIEVES

[AnchorAlum]

Outback, Schmoutback. It's about being able to get into a $400,000 home when you make $25K a year and got the place with a liar's loan or no-doc loan back in 2005-2006 and then you lost your job AT the Outback as a hostess when all the other folks who made $25K a year and went to Outback once a month lost their job at the call center and couldn't go out to eat, and the Outback shut down.

Oops. Your ASS should not have been in that house to begin with, but Barney and Chris and Barney's friggin' boyfriend at Freddie/Fannie forced America to accept their theory that all Americans should have a house. Got news, Barn. Not everyone can own a house cause they can't pay for it. They can barely pay for the '98 Trans Am they got at Drive Time.

But here they are in Happy Acres gated community, enjoying the pool and the tennis courts and oh, by the way, they don't REALLY expect you to pay HOA dues or whatever they're called, do they?

Uh, yeah, they do. Your neighbor, that sucker, pays his. And now you want him to pay more since you think you are somehow so special you don't have to pay for yours? Right. The bills for cleaning that pool and servicing that gate keep on coming whether you can pay or not.

My company manages HOA's. I've been in this field for 12 years. You would not believe what we see every day. Among others, I blame site agents who sat in the model homes and over sold these folks with 1.9 teaser rates and the idea that they could re-fi in one year to a 3.9 on a house that's appreciating overnight. What a load of garbage.
Then there's the mortgage brokers and title companies who made a killing on these "Property Virgins" who got into these houses with zero down. It's called having no skin in the game.

And yes, Florida takes an average of a year and a half. That's on average. I have some sitting in houses for three and four. When the banks get close, they file bankruptcy. The process comes to the proverbial screeching halt. They never show up for the initial hearing in 30-45 days, the judge is required to give them another chance to show up in another 30-45 days (that's as much as three months for you laymen) and so it's dismissed.

Think it's over? Nah. Since only the husband filed, who's up next to file the Bankruptcy? Why you guessed it - the wife. So now we're up to another six months of living free and easy. You look in their files and they've been gaming the system for years.

The real suckers are those of us who just sent in our mortgage payment.

[Drolefille]

Just because they've gamed the system doesn't mean that most people who default are gaming it.

[honeychile]

Originally Posted by AnchorAlum

The real suckers are those of us who just sent in our mortgage payment.

Bingo.

[Munchkin03]

Originally Posted by AnchorAlum

Think it's over? Nah. Since only the husband filed, who's up next to file the Bankruptcy? Why you guessed it - the wife. So now we're up to another six months of living free and easy. You look in their files and they've been gaming the system for years.

The real suckers are those of us who just sent in our mortgage payment.

Don't you think that the system as it stands in Florida enables people like this? I mean, between the rapid construction of poor-quality homes and the fact that bankruptcy laws in Florida are insanely lax, do you think that people who are financial trainwrecks come to Florida in order to "game the system," to file bankruptcy and still keep their homes and hide assets in their children's names?

I've been wondering this because whenever I read these articles, they usually are about people in Florida (and occasionally the IE and Vegas). Also, being an architect who grew up in Florida, I see these homes and I wouldn't pay $10 for them, let alone $400K. Most are constructed so horribly.

[AGDee]

Another thought struck me. When you sign those mortgage papers, one of those papers has this horrendous page that tells you how much you will pay for that house (with the interest all included) over the 30 years of your mortgage. That figure is usually around 3-4 times the purchase price of the home. For someone who has been paying their mortgage regularly for 20 years and then lose their home, they've paid for that house twice already, honestly. The bank takes the whole house back and they are left with nothing at all. There's something that doesn't seem quite right about that either. However, that's the risk we all take when we get a mortgage and we know that. It's still pretty awful to experience though.

[amanda6035]

Originally Posted by AGDee

Another thought struck me. When you sign those mortgage papers, one of those papers has this horrendous page that tells you how much you will pay for that house (with the interest all included) over the 30 years of your mortgage. That figure is usually around 3-4 times the purchase price of the home. For someone who has been paying their mortgage regularly for 20 years and then lose their home, they've paid for that house twice already, honestly. The bank takes the whole house back and they are left with nothing at all. There's something that doesn't seem quite right about that either. However, that's the risk we all take when we get a mortgage and we know that. It's still pretty awful to experience though.

This is exactly why 30 year mortgages are lame. Get a 15 year mortgage, with a payment that is 25% or less of your take home pay, get a little less house, and pay it off a bit quicker. For a couple who buys the house Pre-kids, it'll be paid for before the kids go to college. <--My goal

Banks are in it to make money. If you dont want to give the bank all your money, pay for the house in cash. Yes, it can be done. If you make $80K a year and live on $30K, you can buy a house in cash in 3-4 years.

I learned the hard way when I bought my brand new off the lot 2003 Totota Celica, which was over priced at 23K, and I paid and paid and paid on it, and even paid it off 2 years early, and STILL paid over $37K total for the damn thing. Let me tell you, I'm driving that car until the wheels fall off...and then I'll replace the wheeels and keep driving it some more.

[PiKA2001]

Originally Posted by Drolefille

Just because they've gamed the system doesn't mean that most people who default are gaming it.

True, I know a lot of people who are honestly sacrificing to keep themselves afloat but these people who are spending spending spending instead of paying their mortgage are just being irresponsible. The fact that they are still eating out, going on the boat ( Why didn't they sell it?) and going on casino vacations just shows that they haven't learned and are STILL living beyond their means.

Say what you want about Outback, but a family of four can easily drop $100 for dinner there and if you go there on a weekly basis it adds up.

[srmom]

I wouldn't make defaulting my first choice, but I'd get over my guilt about it if I truly couldn't afford it. Considering how few banks have followed through with the restructuring of mortgages, I'd rather try to save up money for deposit/rent rather then attempting to pay something I already cannot afford.

This is what my son does for a living - he was hired out of college to be a "mortgage remediation specialist" for a major bank who bought a smaller bank that had made a TON of "no documentation" loans in Florida.

What he says is that it is getting almost impossible to get the modifications okay'ed by the underwriters due in large part to the moving target that the government is giving them in terms of legislation and help. As soon as they've done the paperwork based on one thing, there's some hitch and they have to go through the process again. Couple this "banging his head against a wall" day after day, along with being in a cubicle call center calling people to try to help them stay in their house and getting treated like crap because who wants to talk to the bank, his life is pretty much sucking at this point - but at least he's got a job with benefits... (and he is appreciative of that)

But, along with the stories of people who've run into tough times and are doing what they can to make restitution or the best out of a bad situation, he also has stories of people who are completely gaming the system.

In one instance, there was a college professor in Miami who bought at the worst time and now is behind many months (by choice because he makes plenty of money), when my son called to offer remediation, he told my son to make the best offer, in other words, to take $$$ off what he owes, not extending terms or reducing interest rates, that wasn't good enough. He had the audacity to tell my son that his offer wasn't good enough and to come back in a few more months with a better deal, because he was sure the bank would. And the sickeing thing is, he's right. Banks don't want to own those houses.

Oh, and another interesting case is the guy who wanted to deduct his losses at the casinos in Mississippi as a "business expense", there are some real winners out there.

I must be a fool for actually thinking it is honorable and right to pay what I promised to pay...

[Munchkin03]

In other words, it was easier and cheaper for some random Joe to buy a $400K house in South Florida than it was for me to rent an apartment in NYC? My landlord required my income to be 45 times my monthly rent, in addition to a 750 credit score. I had to provide a letter from my previous landlord, a letter from my current job, as well as two months of bank statements and three pay stubs. It's easier to get a mortgage, it seems...especially with a liar's loan or a NINJA loan. Also, I had to pay a security deposit and one month's rent--think of all the people who were able to get in a house with no down payment or closing costs!

Who is responsible for this?

[AGDee]

Because a house is a secured loan. They can take it away from you if you don't pay. Rent however, is not. If you don't pay, that's imply income lost while you use resources and live there for free. It's more crucial to a landlore that you pay on time than it is to a bank.

[Munchkin03]

Originally Posted by AGDee

Because a house is a secured loan. They can take it away from you if you don't pay. Rent however, is not. If you don't pay, that's imply income lost while you use resources and live there for free. It's more crucial to a landlore that you pay on time than it is to a bank.

I know why, but shouldn't as much documentation be required? It goes to show that if you didn't have to put any work into getting a mortgage--not saving $$, not maintaining a good credit score, not even giving any proof that you have a job--what's keeping you from walking away? In the case of these people, nothing.

[srmom]

Munchkin, I think you're right.

What he's seeing are people who had no business buying homes, in some cases they have no documentation of income and when he asks what they brought when they got the initial mortgage, they tell him the paperwork was filled out for them and they didn't have to provide W-2's or bank statements, it was totally based on "their word" and in many cases these people didn't have any concept of what they were getting into.

The whole thing is making my 24 year old son very jaded....

His attitude is becoming, "Welcome to adulthood, hate your job and find out most people are either idiots or a-holes."

I'm really hoping that after he has a year under his belt he can transfer to a different department or branch, it's a bummer talking to him, he seems really beaten down. That kind of banking is no fun! Maybe it was back in the hayday when money was rolling in, but now that the piper has come to be paid, the people cleaning up the mess are having a horrible time of it.

I want to know where all those brokers and mortgage loan officers are now? They should be cleaning up their own messes!!

[Drolefille]

Originally Posted by srmom

This is what my son does for a living - he was hired out of college to be a "mortgage remediation specialist" for a major bank who bought a smaller bank that had made a TON of "no documentation" loans in Florida.

What he says is that it is getting almost impossible to get the modifications okay'ed by the underwriters due in large part to the moving target that the government is giving them in terms of legislation and help. As soon as they've done the paperwork based on one thing, there's some hitch and they have to go through the process again. Couple this "banging his head against a wall" day after day, along with being in a cubicle call center calling people to try to help them stay in their house and getting treated like crap because who wants to talk to the bank, his life is pretty much sucking at this point - but at least he's got a job with benefits... (and he is appreciative of that)

I'm sure there are other hitches with the government but nothing stops the banks from helping people out regardless of government support. The stories I've seen pretty much involve a distinct lack of caring on the part of the banks. Obviously not your son's fault, it seems to be happening on the higher levels.

But, along with the stories of people who've run into tough times and are doing what they can to make restitution or the best out of a bad situation, he also has stories of people who are completely gaming the system.

In one instance, there was a college professor in Miami who bought at the worst time and now is behind many months (by choice because he makes plenty of money), when my son called to offer remediation, he told my son to make the best offer, in other words, to take $$$ off what he owes, not extending terms or reducing interest rates, that wasn't good enough. He had the audacity to tell my son that his offer wasn't good enough and to come back in a few more months with a better deal, because he was sure the bank would. And the sickeing thing is, he's right. Banks don't want to own those houses.

Oh, and another interesting case is the guy who wanted to deduct his losses at the casinos in Mississippi as a "business expense", there are some real winners out there.

I must be a fool for actually thinking it is honorable and right to pay what I promised to pay...

It's a bit like people who rant about people who abuse welfare, or medicaid. There are abusers of the system who break the rules, there are gamers of the system who play just within the rule, and there are far more people who are following the rules to the best of their ability.

Mr. Professor has every right to say that an offer isn't good enough. If you're being negotiated with, coming from the perspective of being utterly thankful for whatever you're offered isn't exactly a productive stance. I just don't see that as some sort of jaw dropping audacity. (And it's a jump to say that it's by choice just because he has a good income, it might have been a "choice" of what bill not to pay, not a "choice" not to pay because he doesn't feel like it.)

A mortgage is an agreement, I get the house as long as I pay you. If I stop paying, you get the house. If I had to stop paying, or had to make what for me would be a difficult choice to stop paying, I'd understand that that means eventually I get evicted. But I'm stupid to pack up and leave before I'm served with that notice. And if I qualify to file bankruptcy, I'm stupid not to do that if it's in my best financial interests. I just don't think defaulting is inherently dishonorable.

[Drolefille]

Originally Posted by Munchkin03

I know why, but shouldn't as much documentation be required? It goes to show that if you didn't have to put any work into getting a mortgage--not saving $$, not maintaining a good credit score, not even giving any proof that you have a job--what's keeping you from walking away? In the case of these people, nothing.

Bankers screwed up. They knew they were selling the mortgages and they were lazy/sloppy and were all about making the deal. I agree that people should have known better, but the guy in the suit telling you how wonderful it'll all be and how amazingly affordable this is for you, even on your limited income can be awfully convincing. I've read and worked with mortgages, they're really confusing to people who don't have that kind of experience and there are tricks that can be used to confuse even more, just like with sleazy car dealers who base the cost of your car on how much they think you can afford.

However, unlike the car dealers, the banks knew that by the time your ARM became unaffordable, they wouldn't own the loan anymore and it would be out of their hands. Dealerships wanted you to keep paying.

[starang21]

i remember watching this property virgins show or something like that....two PE teachers bought a 400k home in philly. is this feasible? my gut says not.