Steel emphasized that 2 million mortgages will be resetting over the next 18 months.
Some of these borrowers will have no trouble making their new, higher monthly payments, while others will be able to refinance into fixed-rate loans, Steel said. “Other homeowners, however, have stretched too far beyond their means or have made bets on the housing market, buying up multiple houses expecting to make a profit. Unfortunately for many of these borrowers, foreclosure is inevitable.”
Beginning Monday through the end of November, Steel said an alliance of mortgage servicers, lenders, investors and counselors called Hope Now will send out 300,000 letters to offer assistance to struggling homeowners who may be in a position to move into a more affordable mortgage.
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Have any judges in Ohio, or anywhere else, addressed the credit card industries capture of the bankruptcy Act of 2005. The law appears to have been written not just on behalf of the banks but by the banks. Particularly the section prohibiting civil court action against the credit card/banks.
On that note it is relavant to mention that the consumer group “Private Citizen” has found, and reported, that the arbitration boards that the consumer is mandated to work with are made up of officials who have relationships with the banks for whom they serve. Doesn’t sound like an opportunity for fairness to this consumer.
Thank goodness for the backbone of the Ohio court.
Hurray for Judge Boyko and any other judge who questions the legality of mortgages that have been securitized. Who knows who really owns them? Now, these so-called mortgage holders must prove their ownership. I applaud the judge’s decision and hope that other judges hearing foreclosures claims will follow his example.
I agree Tony and Mishkin. Three cheers (HIP,HIP Hooray!)for Ohio and the good judges who serve the people there. Let’s hope that we see more justice served in foreclosure cases everywhere.
Please clarify this for me. Does this judgement reflect a mortgage that has been securitized into a CDO or commercial paper only? Or does it reflect the holder of the mortgage via a chain of recorded assignments? The latter is my job, which is why I ask.
While I agree that the courts should hold the banks accountable for showing their interest, I feel sorry for the poor bastard that just lost more of the equity in the home, if he had it, to the new legal fees that are know being added to the current balance they owe. Borrower, “I was only $30k behind and was working on getting it until some damn Judge dismissed the banks foreclosure filing and made them spend another $10k in legal fees that I had to pay too…..”
What happens now?…Do they go after they brokers?…
I do not question the legality of the cases and the court’s decision to throw them out but there seems to be a sense of Robin Hoodism here (for the lack of a better word) where it is ok to steel from the rich and give it to the poor.
No it is not! Just because a corporation is run by people motivated by money and who are vilified by the masses as cruel and greedy and who are out there to ruin people’s lives, does not make the other party (the borrower) less guilty. As far as the borrowers are concerned, why did they get in the mess they currently are? Didn’t they get greedy too and bit more than they could chew? Nobody put a gun on their head when they signed up for those mortgages they could not afford. And do not tell me they did not know. It is complacent, shameful and outright immoral for both parties to want to avoid full responsibility for their actions. I’m sick and tired hearing idiotic remarks such as “oh they did not know what they were getting themselves into…”. Oh yes they knew, both lenders and borrowers. Both are in big trouble and I know this may sound cruel but better leave them alone to leak their wounds. They will learn from their mistakes and hopefully will not do it again. Any protectionism in the form of government legislation or intervention by the central bank to protect the borrower or the lender will interfere with the efficacy of the market in stabilizing, putting a burden on future generations to bear the costs of such blatant mistakes.
Just goes to show that lenders need to buy COMPLETE loan packages (including deeds of assignment), and need to file those deeds of assignment immediately after they buy the loan.
You guys need to interview some lawyers familiar with this arena to add context to your report. This could be just a matter of the banks printing the documents, or it could be that the documents they have aren’t legally valid. Big difference. It appears to me, since the order noted that some papers have been filed late, that the banks have been saving costs by not printing the documents. At best, it’s a delaying tactic by plaintif’s counsel. Some bank owns that mortgage that isn’t being paid.
I agree with Bill, what shady brokers do is entirely different than what the final bank who bought the paper would do. They are just filing clerks in the back room getting paid 10 bucks an hour, not money grubbing LO’s.
I LOVE IT,FINALLY AFTER THE GREED OF MORTGAGE COMPANIES,BANKS,TAXES, JUST FINALLY SOMEBODY OTHER THAN THOSE IDIOTS IN WASHINGTON ARE DOING SOMETHING FOR THE ORDINARY AMERICAN, KEEP GOING YOUR HONORS,KEEP GOING
SO THE PEOPLE THAT BUY ANOTHER BOAT INSTEAD OF MAKING THEIR MORTGAGE PAYMENT GET REWARDED ONCE AGAIN AND AS USUAL WE BLAME THE MORTGAGE INDUSTRY.
The HOPENOW program requires folks to be current on their loans. This is not the population in crisis. We have a total disconnect. The homeowners need to be considered for a restructuring of their loans that include allowing them to be behind in payments and that also allows them to get a reasonable fixed rate loan based on a principal balance that is also reasonable and based on an unlayering of predatory origination and servicing fees and charges and that also takes account of the systemic inflated appraisal and lack of escrow for property insurance and tax charges which has created a wordl of homelosers with no property insurance, only debt insurance. Many folks are now upside down on their loan to value ratio. This program is a waste of the trees used to send out the notice is borrowers in “default” are left out.
Exactly, Dan… Where’s the accountability?
Borrower took out loan in good faith, promised to make timely payments, agreed to all terms of said loan.
Borrower fails to make payments, and suddenly due to a simple paperwork error, now the borrower gets a get out of jail free card? How does that sound right to any of you people?
Let’s take out all of the modern-day legal mumbo jumbo that is a product of years of lawsuits from an overly litigious society. 20 years ago, a mortgage loan file was about 1/4 inch thick, now they are 2 inches thick with all the additional disclosures and “CYA” documents that banks use to prevent frivolous lawsuits. Better yet, let’s go back to the days of honesty and integrity, when a handshake and a verbal agreement actually meant something. Home buyer wants to borrow money to buy his home. Lender makes loan based on agreement of timely monthly payments, otherwise he will take the house back as debt collateral. Both parties agree to these terms, so when buyer defaults on loan, there is no surprise or dispute when lender takes back collateral. That’s how it’s supposed to work, no? Funny how a couple hundred years of legal sludge have clouded our view of things, isn’t it?
Aaron and Moe both clearly take personal delight from seeing doom and gloom, and beleive that the irresponsible borrowers are purely victims and should be heaped with charity and praise for their stoicism through this traumatizing time. (traumatizing time = realizing you could never really afford the house you paid too much for + having your loan follow the terms of the note you signed agreement to, exactly to the T.)
I’m not saying the banks are not to blame for funding such stupid loans, but is there no consumer accountability anymore? Don’t we make our own choices about what we do with our money? If we are looking to make a half million dollar investment, shouldn’t we be responsible for doing our own homework and watching our own arse? If we aren’t smart enough to make wise financial decisions, then maybe we aren’t smart enough to spend half a million dollars on a house?
Every single comment/article it seems that comes from either of these two writers is pointing a vicious finger at banks, pitying the poor helpless homeowner, all with a snicker from the corner of their mouths. The gathering of industry news is a valuable practice, but theirs is anything but objective.
LMAO, Joe Schmoe, right on!!
Joe Schmoe, what a fitting name for the comment you spew from an ill informed mind that is hell bent on ignorance.
You say- “Let’s take out all of the modern-day legal mumbo jumbo that is a product of years of lawsuits from an overly litigious society.”
Mr. Schmoe, this has never been contested like it is now. This has not been happening for years as you state. This is a new field of law and good lawyers are under covering the scams and yes, “loopholes” that these lenders in their hastiness to make profits at all costs and servicers have failed to cover their tracks.
These lenders have a duty of utmost care and a fiduciary duty to do what’s best for the client.
FACTOID OF THE DAY FOR MR. SCHMOE- That did not happen and the American people have been swindled by being sold what is essentially a defective product, SUBPRIME LOANS.
Aaron and I take delight in exposing the truth and helping the homeowners that deserved to be helped. There is no secret to it and we believe that NOT ALL homeowners should be helped.
My guess is your an out of work loan officer that is grabbing at straws and you need to go work for Mr. Mozilo where you belong. Fleecing the American people for your monetary gain.
We talk with them everyday and if you look at our previous articles on this subject you will find lawyer comments for the people who are in he trenches.
You think it’s as easy as the bank going to theior computer and selecting print and wala, they have the document? No, no, please read our series of articles and you will see the light sir.
Some bank owns the mortgage….That’s for sure, but who?
Read all the orders and you will understand the implications here.
Moe,
For someone who claims to be the crusader for the poor unfortunate irresponsible borrower, you sure sound bitter in your reply. All I said was that you appear to delight in banks having problems, and that your industry news gathering and commentary is anything but objective. Your response is to immediately make personal attacks on me, as well as make assumptions such as that I am “an out of work loan officer.”
You are a grown man, and it is not becoming of you to behave so childishly. Make a valid rebuttal, not whiny, desperate-sounding personal attacks. Grow up, kiddo.
Next, did you hear what you just said? “the American people have been “swindled” by being sold what is essentially a defective product, SUBPRIME LOANS”
Let’s get something straight here, Mr blind as a bat. Why exactly does one get a subprime loan to begin with? Is it because they have consistently made poor financial decisions in the past, which is why they have a credit rating indicating that THEY DON’T REPAY THEIR DEBTS AS PROMISED? I think we both know the answer to that question, in at LEAST 90% of cases with poor Fico scores. Banks saw the demand for these loans, though they could make money by offering them, and decided to do so. You say the American people were “swindled” into taking subprime loans. It sounds to me like these people (who have habits of not paying their debts, mind you) WANTED to buy a home, and were willing to take any credit terms offered to them that would enable them to get what they want NOW vs. being responsible and saving money to buy it with preferred credit terms LATER. (sound like most of Americans, to you?) The banks decided they could make money on these people (yes, this is GREED, I’ll touch on this later) and they offered them loans that they KNEW were high-risk. Now the banks are losing money on these (bad) risks, and are learning their lesson. Does that take the blame off the borrower who got in over his head? How is that the banks’ fault? The banks number one “fiduciary duty” is to their stockholders, not the borrowers. In any other business transaction, that hasn’t already been regulated-to-death, is it one parties’ obligation to look out for the best interests of the other party? of course not! That’s the nature of negotiating, you need to look out for YOUR OWN interests, and let the other party worry about theirs. This is how common ground is found and agreements are made. You claiming to be a “loss mitigator” should have a better understanding of negotiating than you apparently do.
Also, you love to dump on Mozilo, and made some baseless connection between him and I. First of all, they were known for writing Option ARMs, not so much subprime loans. Sure they did some subprime, but not much by comparison to many other big subprime players. No, they were mostly Option ARMs, which require a minimum 620 Fico, so they are not subprime loans, they are Alt-A.
I think your heart is in the right place, but your head is up your tailpipe. You get so vehement and snippy in your replies, yet you don’t even understand how the business all works.
These people wanted the loans they selected. As I have said before, I totally agree that the banks have their share of blame, but don’t completely absolve the borrower’s of guilt. The banks guilty action was writing loans they lost money on, not writing loans period.
To hear you tell it, subprime loans should not exist at all, which means most of the people your heart is bleeding for, would NEVER HAVE BEEN QUALIFED TO PURCHASE IN THE FIRST PLACE. So are you suggesting that all of these people should have been renting all this time? One step further, now you sound like you’re saying that just because they managed to get their name on title, now they should be enabled to keep their homes for less than what they agreed to, just because they’re in the home now? Someone earlier mentioned that if there is a bailout, it will hurt everyone down the road. The market has to be allowed to hold people accountable for their choices.
Now about greed… if the banks weren’t greedy and wanted to make money by writing more loans one year than they did the year before, then they wouldnt have been hiring all of the processors underwriters and loan officers that they did the last several years. Hell, I bet many of your “poor unfortunate homeowners” worked in the mortgage industry when they bought their homes. If the banks weren’t greedy, they wouldn’t have hired these people, and they couldn’t have bought their homes!
Greed is good and greed is necessary. Everything is connected, and if there weren’t people who were ambitious (greedy) enough to want to start a business, and build it up enough to keep their stockholders happy, then they wouldn’t be creating jobs for people like you to work at.
Hey Moe, got a question for ya… Have you ever worked at a normal, real job, for a big company? If so, what was the company’s product or service? Do you think that company was greedy, and wanted to sell more of it’s product or service than the previous year, increase profits, etc? I’d bet they did, and I’d bet you were glad to have that job when you got it. Better think a little deeper about what you’re saying before you start making childish, baseless statements and accusations about people.
You are doing the entire nation a disservice with the thoughtless rhetoric you spew daily on your website and everyone else’s who lets you post on it. It is not my nature to make personal attacks or get bickery, but you are just over the top. In fact, I am still making no personal attacks on you. I dont know you, you’re probably a very nice guy when not on this topic. You have no idea what you are talking about, and a bank not being able to foreclose on a non-paying borrower is NOT a good thing for the free market. (even if it is due to a paperwork error)
Oh and lastly, how DARE you make such a slanderous statement about me, “fleecing the american people for my financial gain”?? You know nothing about me or my level of business ethics. Since you can’t even make an objective news release, I am guessing my moral compass is aligned more truly than your own.
I have done very few option ARMs in my days of originating. I make ABSOLUTELY SURE that my clients COMPLETELY UNDERSTAND EXACTLY how their Option ARM works, before they get into one. I don’t put gardners who can’t afford anything but neg-am payments into those loans, I tell those people they can’t afford the house. On the rare occassion that I DO write an Option ARM, I do NOT max the margin out so the bank pays me 3 or 4 points rebate. The vast majority of loans I do, I get no rebate at all, and give them the killer rate and charge them a point upfront. My clients know EXACTLY what they are getting and many of them HAVE shopped around and are still happiest with my numbers. So watch your mouth and your tone, son. It’s getting way ahead of your brain.
You should get a job at starbucks or something, because the misinformation you are spreading is much more damaging to society than if you put too much sugar in my coffee.
Are you done yet? I knew I was right.
Hey Schmoe, what is it they say? IF you can’t handle the heat, then get the hell out of the kitchen. While no one has the right to judge anyone on this site, Moe offers great info without trying to “peddle his goods”.
It seems you have a one sided opinion about this mortgage mess. Not everyone bought a home and then decided to pay on their boat instead. There are real people with real problems out there. Regardless of who made the loan, if the borrower is MAKING THE ATTEMPT to work with the lender to cure the default, then why are these banks still telling the HONEST people NO?
Life happens, bad things happen to good people. Some people need sites such as these for information or to simply help them get thru all of this. Before you open your yap, you need to keep that in mind.
p.s. Yes, Mr. Schmoe, there are a few of us that should have the right to keep our homes.
Mom, I just don’t have time to debate senseless debates. Especially with the like of Mr. Schmoe.
I’m amazed at how much time people will spend telling me off. As long as they feel better, then it’s all good.
Some of these loan officers need to vent some steam and apparently they love to do it on my blog.
32 More Foreclosures Dismissed For Lack Of Documentation
In Ohio, judges have dismissed 32 more foreclosures due to insufficient documentation. This is no white-knight that’s going to save homeowners at risk for foreclosure. One law prof told us that whenever we go through a glut of foreclosures, judges…
If a lot of these foreclosures were based on defaulted predatory loans then I have no sympathy for the banks. If every lender a person talks to sells them on some BS loan they couldn’t possibly afford and blows so much smoke up their a$$ then it’s not entirely their fault.
I work for a mortgage company therefore I must respond to the post about greedy LOs. I must agree that some abuses have occurred but most LOs are honest and just doing their job. Let me tell you about one recent loan that is going bad. The client’s mother (a real estate agent) advised her son to get an adjustable rate mortgage because the rate was lower and he could qualify for a larger loan. She told him that he could always refi if the rate went too high. The LO advised him against an ARM but his mother told the LO that she would take the loan else ware if we wouldn’t give him an ARM. The bottom dropped out of the housing industry and his home is worth less than he paid for it. Besides that, when he settled he immediately bought all new furniture on credit and then bought a new Dodge pickup with $638 a month payments. Now he is in foreclosure. Who’s fault is this? I honestly don’t feel that it is the LOs fault. Even today we have clients demanding ARMs. Every mortgage type is a great loan for specific circumstances. An interest only, 3 year balloon is the perfect mortgage for someone that is rehabing an existing property and is expecting to sell in a matter of months. It is a time bomb for the average mortgagee.
Thats exactly what I was talking about in my earlier thread, I am a 21 year mortgage vet getting crucified in the press for the above abuses. The tail end of the baby boomers and the gen X group were the of the “entitlement” generation and they wanted the whole casbah without putting the time in. They wanted new homes, cars, even vacation homes, boats all by the age of 30 and by God they deserved it in their opinion.
And dont get me started on realtors, they are slinking away letting the LOs get shot down when they have pressured us for years with threats to take biz elsewhere and also demands for kickbacks (which I never did and lost biz because of) and the emotional blackmail I have endured. Thank God for the better part of my career I have got my referrals from past clientele.
A few facts:
A. There are no such things as subprime mortgages – there are such things as subprime borrowers
B. Unless a borrower can prove fraud by the lender, they have the legal obligation to the mortgage contract
C. If a mortgage has been securitized, the trust vehicle holds the mortgage. In most cases, the originator (bank, mortgage company or whoever) do not keep it on the books. It is considered off-balance sheet financing.
your clearly an idiot. these judges’ actions only delay the inevitable and cause further losses for both lenders and borrowers. your first loss is your best loss. hey moe sit on your thumb and rotate.
I agree with most of your comments. It is incumbent upon the borrower to understand the risks he is assuming when obtaining a loan. Borrowers should have understood the principal risk inherent in interest only loans, payment option loans, and adjustable rate loans (i.e., payment shock). they failed to consider the potential for payment shock due in part to their belief that they would sell before rate resets or otherwise avoid payment shock. government bailout efforts may temporarily prop up real estate prices, but the fundamentals that drive real estate prices will prevail over the long term. unfortunately for those praying for a fannie and freddie bailout…fannie and freddie have had to sell mortgages to shore up their capital positions and have been unable to provide the backstop liquidity the government and distressed homeowners were hoping for.
delay tactic. flood the basement and send in the keys. you’re only delaying the inevitable. you think deutsch bank won’t be able to produce documents demonstrating they are the owner? what a joke. only people in ohio could think that would actually work. and the others that piggyback off this guy boyko’s decicision. it shows how desparate they are to find a way to keep borrowers in their homes. homeownership is such a sacred theme in this country. what these people are doing amounts to changing the rules of the game when you are losing. childish. i will saw it also demonstrates the need for federal law governing all aspects of mortgage lending. it’s ridiculous for each state to have their own laws for everything mortgage lending and banking. and where are all the affordable housing advocates. i seen maxine waters of the house financial services committee advocating all these bailout attempts. has she considered what the effect of these attemps will be on real estate prices, and thus housing affordability. all these politicians chasing the next popular cause. schumer is a slut for the next popular cause to rally behind. what a joke. i’m moving to canada.
yea i love that. does it make you happy to know that the government rewards people’s imprudent and irresponsible financial decisions. ultimately we’ll finance their decisions, and no one cares about the moral hazard these bailout efforts create. it’s disgusting.
hey i love your post. so far borrowers have in large part escaped scruntiny. banks have been pressured to provide credit to low- and moderate-income borrowers for decades (see community reinvestment act, among other requirements). obviously low- and moderate-income borrowers pose high credit risks. and now people accuse bank’s of being reckless for lending to these same people that it was foced to lend to. and the high cost loan discrimination debate…people fail to mention that HMDA reporting does not include CREDIT HISTORY…THE COMMON ARGUMENT GOES SOMETHING LIKE THIS…SUCH AND SUCH MINORITY BORROWER RECEIVED A LOAN WITH A MARGIN OF 3% WHILE A WHITE BORROWER IN ANOTHER TOWN WITH A SIMILAR INCOME RECEIVED A LOAN WITH A 1% MARGIN…BUT WHAT ABOUT THE CREDIT HISTORY OF THE MINORITY AND WHITE BORROWER!??? DID THE MINORITY BORROWER DECALARE BANKRUPTCY WITHIN THE LAST YEAR??? HMDA REPORTING DOES NOT INCLUDE CREDIT HISTORY…FOR THIS REASON SUCH COMPARISONS ARE FLAWED…I THOUGHT IT WAS APPROPRIATE TO POINT THIS OUT BECAUSE I’VE READ SEVERAL ARTICLES THAT HAVE TRIED THIS APPROACH TO CLAIM INSTANCES OF LOAN DISCRIMINATION…INCOME IS ONE FACTOR OF MANY CONSIDERED DURING UNDERWRITING
OMG thank you for finally saying the obvious!! This has been a huge white (no pun intended) elephant in the room for a long time!
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Gary, this is from one of your own, convicted for fraud, now turned consumer advocate. He says it best:
“Consumers are sensationalized as villains by industry pundits and the media when, in reality, all mortgage fraud requires the orchestrated efforts and coaching of licensed real estate professionals. It takes a degree of savvy to navigate the complexities of a “self-imposed” industry culture that discourages transparency to protect income derived from contacts and a limited body of knowledge. Deceitful real estate agents and loan originators enlist the cooperation of title professionals and appraisers to exploit unsophisticated or otherwise vulnerable borrowers. The consumers targeted are often uninformed and desirous of homeownership or favorable refinance terms even though they lack a satisfactory employment, savings, or credit profile. As a group, consumers are decidedly guilty of lesser crimes than the trusted professionals who mastermind the blueprint of fraud and deceit.” ~Ed Rybczynski
POINT TO THE FRAUDULANT CONSUMER ALL YOU WANT. FRAUDULANT CONSUMERS DON’T FUND LOANS!!!! NOR DO THEY APPROVE THEM. NOR DO THEY SUBMIT THEM FOR APPROVAL. NOT W/O THE HELP OF THE MENDACIOUS MORTGAGE BROKER, THE LOW DOWN LYING LOAN OFFICER, THE AVARICE APPRAISOR and THE TOXIC TITLE OFFICER — THAT IS, ALL OF THE RECALCITRANT REAL ESTATE PROFESSIONALS!!!!
PROFESSIONALS
Well, I must put in a reply to Joe. Sorry Joe but I always have paid my bills but have a limited income. I owned my home free and clear and have never had a loan but figured some of my equity could be used to remodel and start a small business. I was made promises!! I have paid faithfully and because of this underwriter, now I do not qualify to refinance as I was told, yet they have 2.5 times the interest on the loan as what I borrowed!!! Started at a 9.15 interest by Yearly says 11.09. I was brought into a bookstore, crammed into small quarters with others in line waiting to close loans and rushed through the paperwork!! I was tarpped into this scam 2 years back through solicitation. The underwriter deleted a life estate clause and did not tell the lender. Now he has closed up shop and is being sued by his parent Company. Yet, I cannot find help even through, FBI, Attorney General nor no one.