About the Author
Moe Bedard is a leading expert and trusted authority in regards to loan workouts and loan modifications. Moe is the founder and President of Loan Safe Solutions, LoanSafe.org and the main contributor to LoanWorkout.org. He has blogged on this subject more than any other person on earth and has personally been involved in over 300 loan workouts and mortgage audits.
Worse Than a Pimp on a Corner. I Haven’t Even Pulled My Pants Up & Their Looking to F**K Me Again
As one of the “ignorant” buyers who fell for the oky doke, I’d like to make a few small comments. I’d like to give a voice to the middle class, hard working single mothers out here who have been slapped in the face with the reality that they could possibly lose their home in the near future.
No biggie for the banks, who get the chance to sell it again.
But a nightmare for the children and hard working Americans who have to wake up in the morning to the reality that all they’ve worked hard for is gone.
I live in a “minority” neighborhood that is bombarded with solicitations to refinance from unscrupulous brokers 24/7 — that means all day long.
We go in to see mortgage brokers like a tourists goes to China. We don’t speak the language nor do we understand it.
We rely on them to explain the fine details of the loan to us, so that we can make an informed decision.
Sure, many of you blame the buyer for being ignorant but to do the amount of research that would be necessary to read the extremely difficult language that makes up a loan document would qualify us as bankers ourselves.
Those ARM loans are tricky bastards!
We foolishly trust that the broker will do THEIR JOB — most people would and do.
I consider myself to be pretty smart but I can’t read Chinese! I might be able to — if I was taught. The mortgage broker should offer Lending 101 for his clients & fails at his duty.
At a closing you’re handed a doc. which is 2 inches thick & told to sign here there & everywhere.
My PP penalty was hidden at the very top of the 2nd pg of an addendum or rider. The 1st pg contained a para that took up less than one third of the page & it simply explained that there would be no PP penalty paid for extra principal payments. They stuck a small para on the 2nd pg which stated that I’d pay six months worth of penalty if I tried to refinance before three years = $27,600.
I swear, I never saw this paper at closing. Never. Nor was anything said.
MY TIL statement said NO PENALTY.
This 1st yr I’ve been charged $12,000 in negative amortization. CW will make $56,000 in interest in three years. Nice work!
My gut instinct told me something was very, very wrong. My loan brokers did some fast talking & even more bullshitting & made a small decrease in the margin to get me to close on this loan. I was just this close to walking, even though I didn’t understand it all. Something just didn’t feel right. Not even a year later, they were calling me to do it again!
Worse than a pimp on a corner. I haven’t even pulled my pants up & their looking to f$#K me again. It was that call that prompted me to take a good long look at my loan docs. Lo & behold, there it was, the hidden PP penalty.
The brokers never said a word about it. Nor did the LO or the Title officer, or the insurance agent. No one.
America is a capitalistic society and the middle class has always been the enemy. The rich love the poor, who they use to keep their pockets fat.
Popularity: 25% [?]
Nov 19th, 2007 at 1:17 am
It is interesting that you were able to read the “Chinese” at home but not before you signed the documents. If you had a negative amortization loan, you knew it going in. Your comment above indicates you clearly understand what a negative amortization loan is. Your lack of accountability is evidence of lack of maturity. I am curious, did you overstate your income and not declare all your debts as well?
Nov 19th, 2007 at 1:27 am
I do agree that there were and still are many unscrupulous brokers out there, but yes the buck does stop with you. You obviously knew enough to understand that the broker took a small decrease to his “margin” as you put it. Did you not know how to go on-line and look up an amortization schedule to satisfy yourself? You would have then understood you were not making a fully amortized payment and thus not have been charged that $12,000 of neg am.
Nov 19th, 2007 at 1:49 am
It’s really funny how everyone now complaining sold their souls in order to catch a ticket to ride on the real estate train. Now that the train has derailed, no one wants to take responsibility for their own actions and looks to blame everyone else in sight.
You state, “No biggie for the banks, who get the chance to sell it again.” What do mean, they get to sell it again? Banks aren’t in the real estate business, they are in the finance business. They don’t look to profit from their REO’s. Yeah, I’m sure you bought this property from CW and they are just salivating to get it back. Give me a break…
I live in a “minority” neighborhood that is bombarded with solicitations to refinance from unscrupulous brokers 24/7 — that means all day long.” Here we go blaming the brokers again. It’s always their fault isn’t it?
“This 1st yr I’ve been charged $12,000 in negative amortization.” Wait a minute! No one has charged you negative am. That was your choice. Your monthly statement clearly gives you payment options: 1) Your fully amortized 30 year payment 2) An interest only payment 3) a 15 year payment 4) a minimum or negative amortized payment.
You clearly chose to make the minimum payment due and thus incurred the negative amortization yourself. CW did not charge you this as you state. You chose, of your own free will, to make that payment. Why did you not make the fully amortized payment?
“prompted me to take a good long look at my loan docs. Lo & behold, there it was, the hidden PP penalty.” Humm, disclosed in the loan documents yet you claim it was hidden…Isn’t that an oxymoron?
Nov 19th, 2007 at 1:55 am
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Nov 19th, 2007 at 2:00 am
Did you feel that way when you were making those reduced payments? It’s not the Broker that did the signing..that was you, poor single mom with a bad attitude! Why did you wait for over a year to take a good long look at your loan docs. Especially if you were all that suspicious all along. Blaming someone else does not work all the time. Unless you are illiterate, you have no excuse. Based on your comments above, you know enough about the terms of y out loan that I’m betting you knew all along. Are you looking for a big lawsuit, or maybe someone will send you $12,000 from your Brokers office. Your very comments make me sick!
Nov 19th, 2007 at 2:05 am
I’m sure these comments are from the fraudsters who sit all high and mighty behind their computers. Fat on grease from the fat they have fed upon as they drive their not paid for almost reposesed BMW’s bought by burning the American people.
All the while you claim as if your some kind of professional or whatever lame clever title your slimy little minds can think of. What a joke. There is no schooling and most of you lames can’t even read the crap you peddle.
A professional that just had to have a pulse over the glory years when your sorry a$$es were making fat money selling crap. Now, you sell, well nothing and you live a miserable life behind a computer. Now, that your wife has left you and you can’t make a dime because there is no more crap to sell.
Yes, we bought your crap. Yes, we didn’t read your crap because we can’t read crap. Take your head outta your a$$ cause that’s all you speak, crap.
Nov 19th, 2007 at 2:06 am
You are a “JACK ASS” You decided to take the lower payment on a negative arm, becuase you didnt want to pay the real payment. You clearly knew this was an “ARTIFICIAL PAYMENT” but you too kit…becuase you are a pig with your money, a pig with your budget, and you wanted the lowest payment now, with no worried towards the future… Now you see a few articles of real people abused in the Purchase/Refinance Mania..and you jsut feel it’s ok, to play, poor me, i am so stupid, i didnt know better… Why dont you respect yourself, and jsut admit, you are a pig when it come to your finances, and you didnt care
Nov 19th, 2007 at 2:07 am
I work for another big bank where all we sell is a neg-am. I have had many clients who I had worked with for hours explaining what a neg-am is and how it can be a good or bad thing. When it comes to refi or a purchase loan all they want is a lower payment.
They keep making lowest payments and then blame us for not disclosing them the facts.
Its pretty simple, you dont have to be a rocket scientist to find out that if the cost of money is $200 a month, and I am paying only $100 who is paying the other $100.
I love those borrowers who have taken 3 cash out refinances in last 5 years and have taken out 5 times the money in cash which they paid for Down Payment & now cry to me on the phone that they are loosing money because the price of the house is less than what the last fraudulent appraisal they used to defraud the last bank. And guess what it was the Broker who is always blamed, and they were the innocent bystanders!!!! Driving the big humvee they bought from the last cash out….
Nov 19th, 2007 at 2:08 am
Funny, loan officers with attitudes. Get a life and get a job. hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahhahahahahahahahahahhahahahahhahahahahahahahahah HAHA
Nov 19th, 2007 at 2:16 am
You categorize everyone in your own little warped minds as you wish. Yes brokers and loan officers with little minds and big words polluting a good blog. Haters. Fraudsters. Criminals. Yes, criminals.
Not all of you but a lot of you are or were. Maybe the good loan officers will speak up here after the negative mud slingers vent their steam.
They blame homeowners cause they can’t make a dime anymore and they are miserable.
Nov 19th, 2007 at 2:30 am
lol, it’s not our fault you are stupid, dishonest or greedy. If you are too dumb to read the terms, or don’t have a smart relative to take with you to explain it, you shouldn’t be buying a house. That’s not “crap”
I’m just sayin! We only peddled what you were willing to buy. Jealous of the BMW’S huh? 
Nov 19th, 2007 at 2:33 am
Story Submitted by a Middle Class Hard Working Mother:
You forgot one thing….Your Brain..
Nov 19th, 2007 at 2:37 am
Ned, not all Loan Officers and Brokers are criminals, anymore than all homeowners are victims. There is no one sector to blame. It takes two people to sell lies. One to tell it and one to believe it. Lenders could not have done all this without the collaboration of the homeowners. And no one could have done it without the Investors.
Nov 19th, 2007 at 2:59 am
I a mortgage broker, attorney and licensend real estate instructor for many years. There is no question that you and most of the other folks who are now dealing with mortgage payments that you cannot afford are partially to blame for your own misfortune. Let’s face it; did you really think that you were so special that the broker was getting you a loan at 1.5% with no strings when everyone else was happy to get 6%. You knew you were going to be adding to the principal balance. You didn’t care. Maybe you thought housing prices would go up instead of down and you could refinance in a year.
Noone wants to take responsibility for their actions anymore. Noone thinks of consequences until its too late. Personally, I would love if there were a requirement that everyone who gets a mortgage has to hand write a statement indicating that they understand their rate, their APR and the specific terms of the mortgage. It would be 5 or 6 sentences, written and signed in front of a notary. Then, when anyone bellyached that they didn’t know because they didn’t read something, you could whip out their handwritten statement.
On a final note. There are many unscrupulous originators out there. The fact is that when I discuss an Option ARM with a client, I discourage them from using it and will only assist them if I think they can handle it and have no other choice. Licensing and education should be able to partially solve this problem.
Nov 19th, 2007 at 3:00 am
There are good and bad in every sector may be more bad in the money related sectors. But that does not give consumer a pass on due diligence & personal accountablity. Many of us have been working hard against all odds in this industry, to help people realize the American Dream. The stories about finacial people screwing consumers are very common. Everyone knows them. Then why is it that when its time to sign your own contract the same people forget to do due diligence…
There are no signs on any Freeway ramp in US stating that you should not walk on the freeway, there are no signs saying that you should not dare cross it… now if some one walks on the freeway and dare crossing it and gets hit by a car, who’s fault is it? Henry Ford’s cos he invented the motor car???
I have been doing loans for past five years, and doing more business in these past months than I did at peak of the market, do you know why, because i am getting a huge flux of referals from my old clients and their family. And guess what? most of my old clients who call me for a referal all ask me about what is going on in the industry, because they cant believe these stories, since to them I represent the industry and they have seen results of my work. Most of them have the same neg-am loans, over 90% of them are regular hardworking middle or even below middle class americans, who have considerably improved their family’s finacial situation by buying a home. So let’s not just blame it all on the banks & brokers. Banks are in the business of lending money & charging interest. Thats the bottom line. If you think they will give it to you for free, then you need a reality check.
I do a lot of sub-prime but I have never done Sub-Crime. Whats happening in the market today is the result of a lot of Sub-Crime getting exposed.
There are many innocent casualities of this shamefull episode. An open marketplace have its own ways. Soon we will be cleansed of the garbage (at least for a while). And the industry will be back up again.
Nov 19th, 2007 at 3:06 am
I’ve been a loan officer for 15 years. I’ve always despised Option ARMs. Not because of the neg-am per se (heck I’d take a neg am feature if it were attached to a 4.00% 30 year fixed loan). I hate Option ARMs because they are lousy one-month ARMs. You couldn’t find a more vociferous opponent of Option ARMs than me. I’ve never done Option ARMs. I refused to. That having been said, the author of this article is clearly an immature whiner. She knew what “neg am” was going in, and she knew enough to know what a “margin” is and why it mattered. It sounds like this was a refi of her primary residence which means she had a three day rescission period to read over all of her documents. She could have rescinded. As was stated by others, she could have paid more than the minimum payment each month. She’s not stupid. One can tell that by reading her article. She was lazy. Too lazy to research the kind of loan proffered. Too lazy to seek trustworthy counsel (or did she ignore the the kind of good counsel I always gave: “don’t do an Option ARM!”). Too lazy to read her docs during rescission. We all know people like this. People who just always seem to have bad luck. Funny how lazy people seem to have really bad luck. Well you make your own luck, honey. I’ve seen a million people like this in the last 15 years. It has nothing to do with level of income. I’ll bet she’s one of these people who can’t even find their last paystub. My advice is: get off the couch, put down the potato chips, turn off “Cops” and start to take responsibility for your own life.
Countrywide is still evil, though.
Nov 19th, 2007 at 3:31 am
A long time ago when dinosaurs ruled the earth, there was only one type of loan. FIXED.. it could be a 30/20/ year loan. I remember these well, and the loans were submitted to the loan committee, usually officers of the company for review for approval. (yes the volume was that low)
Part of the problem today and for the last 10 odd years, is the number of programs available. Each lender had literally hundreds of different program types.
Even people in the industry had trouble understanding all the terms. The point is we got too complex, and then let allot of idiots peddle these highly competative, lucritive and illogical loans to the unsuspecting public. The programs changed faster than HUD could change their pamphlets.
The mortgage broker was responsible to explain the loan to the borrower. As for “taking advantage”, well.. Borrowers do need to read the documentation period.
If the TIL is different from the documents, i.e. no prepay, and the note and mortgage security instrument says there is (which I doubt) then she has a right to complain to HUD. However, all lenders have prepay disclosure statements, riders (note and security instrument) so her “finding” it after the fact is just too bad.
It was the broker’s responsiblity to explain the product. PERIOD.. And her job to ask, and verify that the broker was submitting her loan application in a truthful manner.
My builder/lender tried to peddle that to me and I said no way. Remember, if something sounds too good, it usually is too good to be true.
Nov 19th, 2007 at 3:44 am
I am sorry for most of your comments. This is why we are in the situation we are in now. It is OUR responsibilty to insure that our clients understand the terms of the contract. I have too many clients infront of my desk explaining the terms that should have already been explained, but money got in the way of YOUR good judgement. So I say YOU are stupid and I hope you are out of a job real soon….
Nov 19th, 2007 at 3:57 am
Nice try, Moe. You are a fucking dope. Knock off the bullshit that you didn’t know what was going on. You didn’t want to know. ANd if you are so stupid that you don’t figure it out on something as important, you deserve to lose your house. As for the two inch thick pile of papers you had to sign, you can thank those stupid government whores who want you to think they are looking out for your best interests, and subsequently make you sign that stack of crap. You mean to tell me you didn’t read it? Hah, call your fucking Congressman and thank him for it. ANd do you want to know what Barnie Frank is coming up with to to stop this in the future?? Yup, you got, more papers to sign, all in the name of more disclosure.
Do I sound like I am fed up with this bullshit from everyone? Maybe because I am. I’ve seen a bunch of lying bastards take the money year after year when they could and spend it like drunks. ANd now, when reality sets in you bunch of fucking morons start crying that you were taken advantage of. FUCK YOU. You knew exactly what you were doing. Now deal with it, asshole!
Nov 19th, 2007 at 4:00 am
Anon,
You have a lot of nerve wishing people out of a job. We are merely pointing out the facts in the poster’s comments.
Fact: Poster had a choice of what payment to make.
Fact: Pre-payment rider is attached to the note.
Fact: Poster made the minimum negative am payment
Fact: Poster made no mention of taking personal responsibility for her actions.
Fact: Poster had a three day right to rescind
Fact: Everyone is looking for a convenient scapegoat
Fact: You are an ass…
Nov 19th, 2007 at 4:13 am
I think both sides have a good point. Let’s face it, for most of American history we COULD count on people doing their jobs, and doing them well. But for the last 15 years that has all gone down the crapper. The fluffy “me” generation attitudes are at direct variance with how the US has always been. Most people doing EVERY kind of job today are pretty shitty by historical standards.
On the other hand, in the past, people would NEVER have let someone else be responsible for their own understanding of something as important as a housing mortgage!
And so seasons change, here we have an American public so used to being taken care of that they will let the most important things in their lives fluff by with nary a concern.
And we have entire industries of “professionals” whose own true feelings of professionalism, and ethics, and morals, is so piss poor and pathetic that they will push any pile of paper around which they think will get them some money. It’s not THEIR fault what anyone else does, they’re going to a party tonight! Yee Haw!
Well, what happens in such a situation? A MASSIVE TRAIN WRECK HAPPENS! In the future, professionals will be professional, and citizens will be responsible. I suppose this kind of boom and bust happens regularly in history, but this time it is unusually vast and painful in its scale. Oh well, some time has to be the “biggest ever”. Lucky us, looks like that’s right now!
Nov 19th, 2007 at 4:16 am
Option ARMs are clearly not for everybody. But don’t worry. You will not be charged a prepayment penalty if you do a curtailment for the $12,000, and if you do so you’ll save on the interest that you fear you will be charged. You seem to know your way around loans, so if you have been making the minimum payment then you must have been putting the cash away into other better investments. Right?
Nov 19th, 2007 at 4:30 am
Prepayment penalties should be made ILLEGAL.
What kind of a world has this become where the rich penalizes borrowers for paying them back EARLY?
I am sorry that you were deceived by these unscrupulous SOB’s. There should be protections to guard against crap like that… I will NEVER sign a mortgage loan document until I have a trusted lawyer READ over the entire thing and make sure that there is not ONE item in there that I would disagree with.
There is a special place in hell for these scam artists.
Nov 19th, 2007 at 4:30 am
The cold hard truth of the matter is that the “crowd” drove up the cost of real estate to unsustainable levels. The crowd, however, is always wrong. During the Tech run-up, when your neighbor became a day trader, the market was doomed. Looking around today, nothing has changed. When your neighbor became a self-proclaimed property flipper - you knew it was time to sell real estate. The crowd was trolling for easy riches in real estate. They drove prices up to a point of unaffordability. In response, the markets created loan products to meet their needs. If it weren’t for these exotic loan products, virtually no one would have qualified for a mortgage. That being said, everyone who signed on the dotted line knew exactly what they were getting into. They simply did not care. Their common sense was blinded by their greed. Now they are paying the price and looking for someone to blame (and sue)…
Bottom line - take responsibility for your own actions…
Nov 19th, 2007 at 5:23 am
The people whom have Prepayment Penalties are those whom have crap for credit, shop on lenderTree and those whom dont bother to read!!! Nothing is hidden in those mortgages. if you need an attorney to read over you mortgage docs, then that is your own damn fault that you are going to be charged by a lawyer to inturept something that is easy to comprehend if you have a high school diploma.
Nov 19th, 2007 at 5:30 am
I have had a FHA fixed rate CW loan for the past 10 years, and for the past ten years CW has sent me countless solicitations, and in my option MOST of these were designed to confuse or miss- lead a naive borrower. Some were even disguised as government documents saying
a PMI refund was due to me, this is the second notice please call…. I won’t go into to much detail, but let me say this
CW is scummy and so are the brokers who peddled this crap.
But on a happy note, i still have my 5.75 fixed, and CW now sends me CD adds offering 5.5% interest.
Nov 19th, 2007 at 5:37 am
2 Patti and some other shyster LOs: What a stupid LOs. Read the text again, are you 2nd graders who lack comprehension skills ? One of her major issues is that LO concealed PP. Some of you morons conviniently blame the poster for minimum payment option she took without menitoning responsibility of shyster LO to disclose PP showing your solidarity with that crook. I walked off one closing because one of your bastardy brethren was trying to pull a fast one but I can certainly see that few of my relatives or friends can fall prey to some sleazy, slimy bullshitter LO.
Lie by omission is still a lie. Obviosuly you are going to cover your butt saying “She signed it! Not our problem” but that will really show lack of ethics and why shyters like you should be put out of business.
Nov 19th, 2007 at 5:37 am
Boy, lots of negative comments and points of views over this issue! REFLECT; If property values were still going through the roof anybody with a pay option arm would not be complaining!
Moving forward the borrower and loan officer or broker should do the following:
1. Besides the borrower signing loan disclosures go over the GFE, TIL, and provide the borrower with the loan description of the loan program in question and guidelines
2. Broker or LO should advise the client to maintain a copy of the GFE & TIL throughout the loan process to compare the documents with the actual loan docs at signing
3. Broker or LO should get the a early copy of estimated HUD(1), a copy of the mortgage note through escrow when docs arrive, and provide them to the borrower for review before signing loan docs.
THIS SHOULD BE MADE LAW
I do this with my clients and have escrow always either email or fax these items the client has time to evaluate the loan with my honesty to keep it clean and professional.
This whole mortgage credit crisis will truly make consumers trust internet loans over a brokerage or retail firm. No one from both sides sees it coming but believe me its here. I attended a webinar this week and seen the future for license loan officers who are computer savvy. Brokers who employ LO and consumers will start to see the change in about 4 months. Internet mortgage brokers already have warehouse lines with mortgage companies, title & escrow, and the pricing for the loan itself where closing cost are 30-70 percent lower than what a broker, bank, or retail outlet can offer. Plus, the average loan is done in 12-15 days!
Look down the road people and you’ll come to realize (whizkid) I’m being brutally honest about the future of technology and the human mind set with mortgage loans for consumers.
Don’t Blink!
Nov 19th, 2007 at 5:39 am
i feel really bad for these homeowners who may lose their homes. the loan officers and banks have a moral obligation to preserve the credit of their customers its plain good business sense. the banks should extend the 1.5 % percent rate for 2 more years, eliminate the negative amortization, eliminate the prepayment penalty, and extend the loan for 60 or 90 more years to give the customer a reduced payment and afford the market to correct itself in 2 to 5 years. if my plan was accepted we would all float for 2 to 5 years and the secondary market, including the bond market would stabilize and there would be a release of the capital needed in the credit markets. property values would readjust back to the cost of construction and inflation, meaning the property values would stabilize giving everyone the opportunity to keep buying while preserving equity markets. trust me if this simple plan was enacted by the fed first they would have to give me the noble peace price in credit dynamics and allow me to take Bernakes job. he’s an astute moron who doesn’t care about the economy, the world, or the people inside it. the president is also a moron for allowing a potential recession to fester as his clear lack of economic skill predicates his use of crack in his early years. if someone would please email the morons this simple solution just footnote me at the bottom. oh and buy the way i never want to pay federal or state income tax ever if my policy is enacted.
Nov 19th, 2007 at 5:39 am
A,
He probably did. He knew what was going on. He got his house and knew how he was getting it and then realized what he got later on was ripped and now he’s mad. Its disappointing when a naive client truly is deceived but its in this case, he was being slick and it backfired. Naive clients don’t knew half the stuff this dude just mentioned. He knew all the variables involved. I bet you something else went wrong on his end, now its someone else’s fault why he’s f***ed as he puts it. Your loan goes negative when you stop paying the right amount. I wonder if he lost his job or the money he said he made on the 1003 wasn’t right. But then again I guess that’s the loan officer’s fault too.
Nov 19th, 2007 at 5:41 am
Anon, if you have “too many clients in front of your desk asking these questions, why don’t you send them home and not collect any money for your work. In fact, why don’t you just offer your opinion for free. Why don’t you want to work for free? You seem to be misinformed and poorly prepared to comment to these people. I’ve spent hours explaining terms to fools like this lady that began this post, and you know what, they didn’t care. They thought they could get something for nothing, and that’s what this gripe from consumers is mostly all about. Not only did they expect to get a loan @1%, they also demanded that we deliver it in 1 week,believe every lie they put on their application, on their terms, when they get damned good and ready, pay their closing costs, and fetch their slippers while we were at it. Now they whine???? Try to explain to a person that doesn’t understand a pay option arm, and discourage them from taking it…lol…they think you are trying to cheat them because you are depriving them of that great start rate. You can use words like “teaser rate” and adding back a balance to your mortgage and adjustments till hell freezes over. It’s about instant gratification, low payment right now and to hell with tomorrow. And just so you know moron, I am not out of a job and won’t be any time soon. Back when people were standing in line to buy a house on these option arms, you can’t believe how many times they had the nerve to tell us we owed them if we couldn’t get all the paperwork to the title company on time. We paid for hotel rooms, delivery vans, and took crap from people that was inhumane. They bawled, cursed, screamed and bullied their way in to these loans. We didn’t write the guidelines you idiot. We just lived by them the same as everyone else did. I know alot of Brokers that hated pay option arms. And they lost business because they didn’t offer them. So get off your high horse and quit being a hater, wishing people lose their jobs.
Nov 19th, 2007 at 5:47 am
Hmmm… maybe she has had someone looking over them since. Shame on her for thinking her broker was actually representing her.
Do you really expect the average bear to be able to read legalese? Or have a degree in accounting.
Seriously, bring your brain to the party.
Nov 19th, 2007 at 6:01 am
That’s funny. If she was doing that then she wouldn’t have posted this bullsh**t story. She didn’t think the response was going to be like this
Nov 19th, 2007 at 6:41 am
I have been a mortgage originator for over 20 years. I have NEVER allowed a client of mine to do an Option ARM loan. They do have their place but 99 out of 100 do not get it. Are there greedy brokers out there? Absolutely. Are they the main problem here? NOT AT ALL. If the LO didn’t disclose how that loan worked, shame on them and the consumer. REad the documents. If you got the loan through a refinance, you have 3 days to review the paperwork and cancel it if you wanted to. There is enough blame to go around in this mess we are all in. Greenspan for pushing everyone to ARM loans when the FIXED was so low. Investors and lenders designing programs that should have never been designed. Realtors selling homes to people that had no business owning one. Mortgage brokers getting loans to people that shouldn’t have one. Appraisers pushing values. And yes, the consumer for not using their brain. The “I had no idea how that loan worked” crap is an excuse. How do you think your credit card works when you make the minimum payment?
Nov 19th, 2007 at 6:50 am
Before you say ignorant things like that, consider this: Let’s assume the L.O. was a slick bastard and lied about the whole thing. First of all lenders by law have to send the client a copy the type of loan the L.O. has originated and submitted.She should have stopped there. The L.O. is not privy to that transaction and she had all the time in the world to question and protect herself. But lets say she didn’t do that. After a week or two during the processing period she again didn’t question anything? By the way, who doesn’t question people they don’t know when involving money? That’s a whole other issue in this. Anyway, let’s say she makes it to the closing and signs everything, which in this country means you have read and understood what you are signing. The title company by law must explain the documents presented. It not only protects them, but the borrower as well. And then there is the 3 day rescission. And to add something on that. I have seen a lender rescind a loan after the three days if apparent fraud has taken place. She knew exactly what was going on. Obviously, a 30 fix or arm wouldn’t allow her to qualify, so she opted for a product that will destroy you if you don’t handle it accordingly. PP’s are to offset the lender giving you a cheaper rate. That’s why they are offered. She could have gone the other way and waived the PP but that probably defeated the purpose of the super fantastic rate she got. But then she could have gotten a simple fixed rate. You are missing the issue here. This lady is not stupid. She can read and she has good understanding. What she didn’t tell you was her full agenda. Why was she refinancing her home? It wasn’t rate and term. She probably had a good rate to begin with. Her credit was good. Opt arms aren’t giving to clients with credit issues. Did she take money out? And why did it take a year for her to realize she did something crazy? If someone concealed the prepay, then she needs to contact the financial institution that governs her state. But she won’t because they will ask her the same questions everyone here is asking. If there was fraud committed, not just the L.O. but the title attorney is also liable. However, the L.O. concealing the PP is not the issue. She didn’t pay the amount she needed to keep her loan from going negative. Did the L.O. conceal that too? She hasn’t paid her mortgage correctly for a year. The PP is the least of her problems. Her ass is in deep sh*t if she continues with this foolishness her loan will recasts and the terms will change.She should have done what you did if she felt a fast one was being pulled. Get up and leave. And yes, she signed it and whether she read it or not, signatures attest to reading and understanding. She should have read it. But again, its not about that. She is paying the least amount that can be paid. That is her choice.What was the attorney going to say, you can’t read it before you sign it?Miss everyone with your ignorance
Nov 19th, 2007 at 6:55 am
Hey Seasons-
Best post on this toxic…er, I mean topic. Let’s all put the guns down and work towards solving this mess in each of our little corners of the world. This is one of the best times to be in real estate and mortgages. times are tough but there has never been more opportunity to become an honest dealer and professional practitioner. Our job as a Fiduciary to our clients is to guide them into what is best for their financial well being, their future, and the security of their families. Quite frankly, we suck at it! Thank God this industry is gasping for air. We need to clean house. The thing I can’t believe is that there are still LO’s out there getting loans for the people i turn down! The “me” generation working both sides of the equation, instant gratification, laziness to do the homework, Brokers who do not train Agents / LO’s, “Rah rah” industry “experts” pumping up gullable salepeople with smoke and mirrors (like our race car, kids?) instead of nuts and bolts, and on and on. We need to stop calling the other side names and remember that we are all somewhat guilty of the conspiracy of greed. anyone of these industry posters could have eloquently and clearly rebutted the original poster, who should have trusted her intuition over anyone or anything (Maam, I feel bad for you and I truly wish you well. Neg Am Option Arms are the most difficult and volitile loans out there) Instead, most of you called her names. God bless you, my collegues. Let’s not fall apart over this stuff. Let’s (re)educate the public, help all we can, make some honest money, and answer the critics by providing the calm in the midst of all the chaos.
Nov 19th, 2007 at 7:06 am
Whizkid,
I don’t know where you originate from but where I’m at point 2 and 3 are already laws. You have to give the client a gfe and til within 3 days of application. And clients must have the HUD(1) before they start a closing. This issue is not about disclosures. Its about negligence on the borrowers part. She’s not paying her mortgage right. She accepted a PP to get the lowest possible note and now she has to pay that penalty to get out of a problem she created. And because she isn’t going to admit her own fault, lets just put it on the L.O. not telling her she had a PP. Too convenient. If this was your client, and if you would have explained this like you say, she still would be in the same situation.
Nov 19th, 2007 at 7:14 am
RC,
This response says it all. Classic.
Nov 19th, 2007 at 7:17 am
My life motto is… Never trust anyone who makes a commission off of decision that they are advising you to make. It it doesn’t feel right then it ain’t right!
Nov 19th, 2007 at 7:23 am
A year later? Please. Yes, shame on her for thinking anyone other than herself was actually representing her fully. She’s not average. She knows about margins and PP. She doesn’t need a degree in accounting. Can she read and ask questions? Let’s go a step further, if her intuitions set off the red light, then stop and re-access what is about to happen. You don’t have to go to college for that.
Seriously, take your brain with you on the way out
Nov 19th, 2007 at 7:47 am
I find it amusing that so many people these days like to play the victim when in fact a lot had been done by all parties. The truth of the matter is, everyone was wrong in this latest credit bubble. Let’s point out the shames very quickly as I am assuming most of you will agree with me.
1. Shame on the banks for funding such exotic programs.
2. Shame on the underwriting departments making decisions that should not have been made.
3. Shame on the appraisers for giving too much value on something that was and always will be, a lump of coal.
4. Shame on the investors and secondary market buyers for buying exotic loans or loans with very loose underwriting guidelines.
5. Shame on you, the borrower for not reading your disclosures prior to loan signing and prior to funding. Shame on you even more for not reading your disclosures and documents at signing. You are not a victim. You however may be very unwise. That should have nothing to do with working class, race, religion or gender. Stop playing the innocent victim and actually step outside the box and look at reality.
ALSO- Shame on ML-IMPLODE.COM for posting this on their site. This was a waste of time.
p.s.
who do you think will be worse off later, the client who is going to foreclose on her property or the bank who is going to have a lien foreclose at 115-125% of its appraised value? (not including the depreciating market the home may be in to begin with.)
Nov 19th, 2007 at 8:08 am
Let me get this straight - you went to China, didn’t speak Chinese, and now you’re complaining that you didn’t understand the language? Most of us would have gotten an interpreter, or at least an English-Chinese dictionary. Instead, you trusted the locals to tell you what everything meant? And now you’re suprised you got screwed? C’mon… Something smells pretty fishy with your story. Kinda like the child who plays ball next to the window, and then complains that he had no idea the window might break.
Banks lend money to make money from repayment. Not to get ownership of homes and lose money. Prepayment “penalties” allow the lender to offer a lower rate up front without having to worry that the borrower ends the loan before the lender even gets its money back. Fixed rate loans generally do not have prepayment “penalties” because the lender covers expenses and makes money from the start.
Nov 19th, 2007 at 8:12 am
My wife is just like that woman. No matter what I say she will believe various salepeople and other shysters, she signs documents without reading and so on. It hasn’t cost us much so far since I’m around to put a stop before it gets too far. But my parents are the same way, they woefully underestimate prevalence of dark side of human nature, they think that humans are naturally honest and well meaning. And with my parents since they are in different state I couldn’t intercept when they were taken to cleaners. I had to bail my parents out over stupid refinance some sleazeball talked them into. As for me I’d be damned if I trust any middleman trying to skim of the top. I’m in minority as friends and relatives joke about my anti social tendencies but it does save me from being ripped a new one. So yes, I wholeheartedly approve stricter regulation of any middleman industry. Middlemen don’t produce anything and must be controlled. Even if it costs people like me (who are on guard against shysters) on the whole people will be better off if middleman can’t even puke without disclosures and E&O liability insurance.
Nov 19th, 2007 at 8:31 am
Well, at least you are honest about your situation. We live in a capitalistic system. Businesses are designed to make money and consumers are allowed to shop for better deals. It works hand in hand. The middle is that in the end no matter what, even in a great deal, the consumer loses. Its designed to operate that way. Its the consumer’s task to reduce the lost. This doesn’t apply to just mortgages. Its everything we purchase. As the consumer we are charged with being prepared to engage in this deception, that we are really getting all that we pay for. Nope,never. Everyone is out for themselves in this country. Why should your neighbor look out for you 100%? And why should you be obligated to do the same? In a perfect world, maybe. Ladies and Gentlemen, do your homework. Always believe that the deal is against you because it is. Do what ever it is to be satisfied and accept that. Everything comes at a cost, even free. If a law has been broken or the fiduciary relationship has been tainted, then sue and you will win. Otherwise, we must all govern our complaints accordingly.
Nov 19th, 2007 at 1:16 pm
I want to know how this process started, she just found the house and went and picked a broker off the street. No realtor, no shopping for a loan…….Not to cover the crooked brokers at all, but she probably had credit problems so no one at the bank would even look at her, then the negative am loans are to put people in more expensive homes then they can afford BUT THAT THEY WANT…….and let them work up to them…….borrowers always wanted the home they couldn’t qualify for………these type of loans all had prepays because they were scary for the invester too, you are trusting the people who get them WILL WORK HARDER TO WORK INTO THEM, THREE YEARS AT A LOWER PAYMENT MEANS IF THEY WANT TO THEY CAN PAY OFF ALL THE CREDIT CARD DEBT THEY HAVE……..again THEY BRING A HOME TO THE BROKER THEY CAN’T AFFORD AND BEG………..prepays aren’t illegal, negative am loans aren’t illegal and she states she could have walked out so the broker DIDN’T HAVE A GUN AND DIDN’T FORCE HER TO CLOSE, whining after the fact is getting to be very disgusting to his honest loan person…….if we help the borrower get the house THEY PICKED we are bad, if we turn them down we are bad…….the box is getting smaller and smaller…….but don’t worry stories like this will guarantee THAT NO ONE WILL EVER FINANCE THESE PEOPLE AGAIN AND THEY WILL RENT FOREVER, THE GOOD CLEAN BANKS WON’T EVEN TALK TO THESE PEOPLE……..that is why the brokers started helping people in 1980 and put 1 trillion people into THE HOMES THEY PICKED…………
Nov 19th, 2007 at 1:16 pm
What’s that old addage from military recruitment USMC - U signed the MF Contract. Let’s READ before we sign gang!!
Nov 19th, 2007 at 1:39 pm
I HAVE BEEN SELLING THE OPTION ARM FOR YEARS FIRST ON THE WESTCOAST BEFORE IT EVER WENT NATIONAL AND I HAVE SAID THIS PHRASE FOREVER “IF YOU CANNOT HANDLE A CREDIT CARD THEN YOU CANNOT HANDLE THE OPTION ARM!!
Nov 19th, 2007 at 1:54 pm
Like a ho…you got pimped…as it should have been. You claim victim…but you have so much culpability that you fail to take responsibility for. I say keep your pimp hand strong and smack you around some.
Nov 19th, 2007 at 2:20 pm
The broker as the bad guy rant is getting old very fast. Sure there are unscrupulous brokers out there. However, there a many good ones too.
I wrote an article about who the bad guys really are in this mortgage debacle. You might find it interesting and it can be found here http://express-home-mortgage.com/blog/2007/11/17/say-goodnight-to-the-bad-guy/.
Nov 19th, 2007 at 2:23 pm
The way all you mortgage people speak is a perfect example of the scum you are. You will all be jobless by the time this is over you parasites.
Nov 19th, 2007 at 2:28 pm
2 words.
ANGER MANAGEMENT
Nov 19th, 2007 at 2:34 pm
Of all the comments. Maybe 2 or 3 people do not sound like loan officers turned pissed off drunken sailors.
I post these kinds of stories to give an example of what homeowners are going through and I expect to get a reaction from the mortgage crowd. Most the comments prove what most people think of brokers and loan officers and the comments solidify that perception people have.
These comments will be seen by all the industry watch dogs who will see EXACTLY what they are dealing with.
Great, keep up the great work and comments. NAMB, CAMB, MBA, and the DRE all love you for making the mortgage profession so darn professional.
Nov 19th, 2007 at 3:09 pm
That was so painful to read. Realtors, loan officers, appraisers, and bankers made a fine fortune in the run-up to the housing peak. I hope they all get what they deserve.
Nov 19th, 2007 at 3:24 pm
As a former insider, I know exactly what the lady is saying. Brokers are the lowest form of life on this planet. Terms are modified after signing every day and brokers laugh about it.
No, assholes, the buck stops with the seller of the loan, who misrepresents the product and fraudulently alters it after the fact. And Congress knows it.
Nov 19th, 2007 at 4:18 pm
What do you think of car salesmen?
Nov 19th, 2007 at 4:33 pm
I am not a broker, lender, realtor, appraiser, or loan-owner. I am not affiliated with the RE or banking industry in any way.
Moe,
You blew it.
Your self-indictment of your fiscal irresponsibility speaks for itself.
Please find a rental you can afford.
Thank you.
A single mom taxpayer.
Nov 19th, 2007 at 4:38 pm
The problem is your “simple solution” would cause a collapse of the financial system. Have you been reading about the writedowns the banks and financial entities have been taking lately? Well, if you force rates down to 1.5% everything goes belly-up - Countrywide, BofA, Fannie Mae, the whole ball of wax. The best solution, and the one all the meddlers and do-gooders can’t fathom, is to do nothing and let the market wash our the bad loans. If the natural process is allowed to proceed, home prices will come down on their own and many of those who were foreclosed on (many of whom probably had no equity in their homes anyway) can then start over with affordably-priced homes.
Nov 19th, 2007 at 5:49 pm
If you’re gonna be stupid, you’d better be tough.
Nov 19th, 2007 at 5:58 pm
Chris,
I know 2 & 3 are laws but loose laws. Most brokers or LO do not get a copy of the note to make sure its the proper loan program discussed with the client. I do this to make sure the lender is honest. I find sometime they make mistake! Call it human error or stupidity so if your borrower gets a copy of the note before signing they’ll be no excuses for their ignorance. Again like I said “if appraisaed values were still going through the roof no one would be complaining!
Nov 19th, 2007 at 6:31 pm
The issue is, that wall street helped to creat this mess by creating mortgage products so that people who shouldn’t afford a home in the first place can buy a home, and then making them profitable to brokers. In my shop, we affectionately refer to that as “mortgage crack”. Take a closer look at many of the products in question…No Doc, Stated Income/Stated Assets. Basically, let’s not verify anything and hope the loan gets repaid? These products were not only profitable for the broker, but the whores of wall street made a killing. Where’s the due diligence of those securitizing the mortgages for sale?
anyway, i guess my point is that there is plenty of blame to go around. From the broker, the lo, the lender, those on wall street (crack dealers), to even the client. I think its very convenient and easy to blame somebody else for one’s situation. The bottom line is, each and every one of us in the equation must accept responsibility for what’s been done, and hope that the industry recovers sooner than later. A complete real estate meltdown would devastate our economy, period.
Nov 19th, 2007 at 6:37 pm
Yeah right!!!
I’m a renter and this story is submitted by someone else.
I’m glad you pay taxes and thanks for sharing your irresponsible comment.
Nov 19th, 2007 at 9:29 pm
Whizkid
You are right and I agree with you. How I have eliminated the client claiming to not knowing what the deal is on their loan is being honest and consistent up front. Whatever the fees are in the beginning is what they are in the end. If I’m able to get an instant approval, then I must decide right then, how the loan will be structured and I stick to it. The GFE and TIL my clients received remain the same short of loan amount adjustments and any insurance adjustment because I’m not an insurance agent. I instruct the client to use my GFE as a reference until the end. This keeps everyone consistent with what’s going on and also includes the client in on any changes that might occur. And honest changes do occur. With something in their hand, any alterations don’t become mistaken as them being taken advantage of. Other than my repeat clients, I encourage my new clients to shop me. I stand behind my loans. I’m usually consistent or better than what others are offering and when I’m slightly off, my service usually overshadows that and they stay with me. When the Hud(1) finally arrives, my numbers are usually right in line with the lenders. Errors do occur but we correct them before the closing is even called. Honesty and some real direction is all the client wants and needs. But at the same time the client needs to be made aware of their responsibility. My goal as a broker is repeat business. Lying and having an ignorant clients is no way to get repeat business. In terms of the appraisal problems. You’re right on that one too. However, the values were bound to top off. One of the major problems is its topping off came at the same time the market is blowing up.
With regard to this post, I still blame the client for most of her issues primarily because of the time she blew off(a year)before doing anything. Reading her comments over and over, she understands more than your normal “just give me a loan” client. She accepted a dangerous product and chose the worst option to pay her mortgage. She did this for 12 months. She got a statement every month. She knew what was happening every 30 days. That right there is where none of what she’s arguing about makes sense and some of the blame from the L.O. has to be removed. If this happened last month or last week, then I would be the first one to say the L.O. had a major part but not 12 months later.
Nov 19th, 2007 at 9:32 pm
We do live in capitalist society, it doesn’t mean it’s ok to make money by deceit and misrepresentation. Capitalist doesn’t mean amoral. That’s why middlemen industries like stock brokerage are heavily regulated. Same must be done to real estate and mortgage brokerage industries. Again something like SEC and very strict rules: no assurances of refinance or any other predictions of the future and so on. And if you do say something about future put the money where your mouth is. Without regulation, you middlemen, run amok ruining lives and productive economic activity.
Nov 19th, 2007 at 9:43 pm
She did hire interpreter if you haven’t read it. That LO was supposedly paid from the transaction she is on the hook and now you are trying to say that she should have brought into picture another middleman ? In the end customer who is not well versed in the subject matter must trust that there is someone in the transaction who is actually not lying son of bit.h. It looks like no matter what happens it’s never sleaze ball’s fault.
Nov 19th, 2007 at 10:14 pm
Two more words: Lying bitch!
Nov 19th, 2007 at 10:57 pm
Alan,
There is regulation. The issue is its state by state laws and every state has different but necessary nuances that don’t apply to other states. Hawaii’s real estate laws are vastly different than New York’s. Florida is different than Louisiana and so on and so on. Certain things don’t apply. The SEC is not govern the same way, so one rule is easily handed down and enforced. 3 years ago, mortgage deception and misrepresentation was going on. This is nothing new. You have to be honest and admit that the L.O. is only the distributor of legal wholesale products. There is no L.O. out there that has created and sold their own product. You can’t say its the brokers fault. The mechanisms that have created this stream of income don’t want to interact with consumers so they use brokers to block what you are complaining about right now. None of them are on these sites saying one word. Its how everything works. Can you go to Nike and buy a pair of tennis directly? You’ll probably go to jail for trespassing. You have to go to Footlocker and pay Footlocker’s price. The same with a car, a bike, clothes and so on. At the same time, the borrower is held liable for understanding that he/she needs to protect themselves from the evil doers known as everyone else in the world. You yourself have bought a home and do you believe you got the best deal? No. However, I bet you were satisfied with what you got. And there is nothing wrong with that. You are satisfied. You did your homework. You like the results. As the value of your house decrease with this mess, is it the appraiser fault. You were satisfied with the results at the time of purchase. If rates went down after you locked your loan, is it the L.O.’s fault you didn’t get a .25 better pricing. No. I think everyone is looking for the absolute and its not out there. Most consumers are lazy, me included, and want someone to do their work for them. Its only then, when it blasts back in their faces do they complain.
Is anyone on this site defending the borrowers who are in these sh*ty loans and who are continuously paying on time and are not losing their homes but who ultimately will have to suffer from the ones who aren’t paying their loans at all?
Nov 19th, 2007 at 11:15 pm
oh really so u think that by preventing the deflation of home values and not freezing and lowering the interest rates on current owners and investors in existing mortgages i.e. anything before december 2006 you are completely off.
the market will fall into a recession by non prevention. as u can see the only bailouts are given to huge financial banking institutions who have gambled tax payers dollars and caused stag flation. the only way to curtail the mess is to bailout the investors and homeowners. there would be no price drop on homes and credit would be fluid as to increase foreign investment in US treasuries and US currency’s. by allowing this mess to fester u slow down economic gains by causing loss of accumulated savings and directing a sudden change in economic venue which can stall future and long term economic growth exponentially. oh and by the way its doesn’t go belly up you provide the the government bailout funds for these institutions to compound and make necessary payments for individual investors and owners buying them time to sell their investments and homes to the secondary market as new 1.5% fixed interest rate products are touted and sold by fannie and freddie to individual investors and homeowners through new mortgages. the foreign investment market would calculate the risk and offer new insurance products to protect the payments and equity against stagflation and economic turmoil by poor economic policy. you know if this policy was enacted not only would everyone keep their property they would buy more and as long as the interest rates are curtailed to meet their lowest margins in 100 years economic prosperity would explode due to proper risk management of the mortgage economy due to compounded bulk sales similiar to a Dollar store Walmart mentality buy more cheap and wholesale save the rest for later. Bernake and Bush should plead with me to take over the economic policy. My face would be listed on a new mount Rushmore by itself.
Nov 19th, 2007 at 11:26 pm
It’s too little regulation. Is there section 7 type of exam to start peddling mortgage products to consumers ? Is E&O liability insurance mandatory before you can even start brokering ? Are you prohibited from making pie in the sky assurances about future performance that may unduly influence retail consumer toward product that he/she wouldn’t otherwise consider ? I have yet to see stock broker who would peddle pink sheets or OTC stocks (equivalent of OA products) on mass scale. You know why ? Because they will be put out of business by Feds.
I don’t have Nike or SmithBarney salesmen calling me around the clock peddling shoes or IPO shares and making assurances about future perfomance and if it were the case and Nike did have some deceptive advertisement promising that they can’t subsequently deliver they would be put out of business too. If Nike sells defective product I can bet a c-note there will be recall. It cracks me up when you compare heavily regulated consumer goods industry with almost unregulated mortgage brokerage business. There are multiple consumer protection laws that any corporation like Nike or Mattel is not dare to violate and when they do they get good ass pounding. Can I say the same about mortgage brokerage ? Somehow I’m sensing you would like to continue to operate in that regulatory vacuum. Well, newsflash, it looks like mortgage brokerage industry isn’t capable of self policing so it will have to be policed by government. Yes, regulatory overhead does cost money but it appears to me it’s still cheaper than consequences of unregulated free-to-fleece-unsuspecting-consumer approach.
Nov 19th, 2007 at 11:35 pm
Sorry, but it’s impossible for me to feel sorry for folks that got swindled by unscrupulous mortgage brokers.
Let me qualify that by saying that I completely understand that some people are not financially adept. I certainly don’t expect every homeowner to understand the “the fine details of the loan.” However, those who got swindled absolutely refuse to accept any culpability in their failure to seek independent representation from someone who actually had a clue. I’m not saying that every poor, hardworking single mother should go out and hire a high-priced attorney before signing loan documents. However, they certainly should bring along someone who unbiased, competent, and will give them proper advice.
I like her analogy to speaking Chinese because it illustrates anyone with a tiny bit of common sense would react in a similar situation. Like the author of this post, I do not speak Chinese. Therefore, if I were about to sign some critical legal contract that was written in Chinese, I would refuse – at least until I could hire an independent translator or Chinese-speaking attorney. If I didn’t have the money to hire an independent translator or attorney, I would at least fax the papers over to my old college roommate who is fluent in both Mandarin and Cantonese. Most of all, I would never take the word of my other party that is pressuring me to sign the Chinese document, especially if I knew they made commissions off of my signature.
Would you?
Nov 19th, 2007 at 11:51 pm
Alan,
The questions I have for you is why do you think she waited so long to do something? If she felt something was wrong, why didn’t she stop? If the L.O. was a sleaze ball why didn’t she go somewhere else? Why isn’t anyone on the title attorney’s ass for not reading the docs to her in its entirety? If she didn’t feel comfortable signing these docs by herself where was her back up and (the L.O. doesn’t apply)? You, yourself said your wife and your parents have done the same thing this lady has done, except you intervened and saved the day. Where is her friends or family? You mean to say no one she knew for free was on her side? At what point did she realized she should stop paying the minimal payment each month? What did she do to the L.O. that supposedly screwed her? The L.O. didn’t print the docs, the title company did. I wish she was on this site and fully explained her whole ordeal from beginning to end. Not the tidbit thing. She’s leaving too much out. I believe we would all be commenting differently on this one if we knew the whole story.
I just read this again and I’m questioning her PP because she said CW called again to refinance the loan they just did. If anyone does, I know the original lender has direct information on the current loan. Is there really a PP? She upside down on a loan she flip upside down. Everyone is on this post going completely nuts. Cursing each other out and saying foolish things. Where is this lady. She needs to defend her post. Besides that, can someone please, please help her.
Middle Class Hard Working Mother, if you are reading this. If your situation is true to form as you state, as a broker, I apologize for the motherf**ker who has you all f*cked up. There are some bad ones out there and its apparent you got one. I’m sorry because as your L.O. I would have put you in something you understood. You obviously don’t understand none of this you are in, despite what I and some others have believed you did. However, I offer you this. If your credit it still good and if you have equity left do this. Call your lender directly and try hard as hell to re-negotiate the 12k or the pp. Regardless of the outcome then go and find a Lender,Bank,Brokerage that you trust and can verify that they are about the business of service and quality work. Do your due diligence. You do it. Refinance your home with a fix rate. Make it make good monthly money sense. Make it make total sense to you. Bring someone to the closing the day after you have read over the Hud(1) the mortgage, note,Til and 3 day rescission. Then close your loan. Get your finances in order and from that point on change your discipline across the board as it applies to money. Then be leary of anything you pay someone else to do for you. Not just mortgages. Everything. Read through some of these comments and discard the bullshit and get your mind right and try not to get caught up again. Good luck. I mean it.
Nov 20th, 2007 at 12:01 am
Fannie Mae raises capital by selling bonds. They use the capital to buy mortgages. The mortgage payments are used to pay the bond holders. Let me ask you a question, Einstein: What happens to Fannie Mae if they’re paying 4.5% to their bondholders but forced to accept only 1.5% from the mortgages they hold?
Nov 20th, 2007 at 12:06 am
Besides, the best thing you could do for poor people would be to let housing prices crash. Then all those poor people who were priced out of the market during the big bubble could afford to buy a home. Anything that is done to artificially prop up home prices hurts the working poor. Stop being so cruel and insensitive to their plight.
Nov 20th, 2007 at 12:17 am
Alan,
I have to say you are a good debater. But here is my rebuttal. Nike does call you everyday and every night when you turn that t.v. on watch Michael Jordan and Tiger woods doing their pitch to you and you realize your tennis need upgrading. Nike has been in trouble for using slave labor to make tennis for pennies on a dollar and you go and buy then for double digit numbers. Did anyone ever fix that? Every commercial you watch is peddling something to you. But this isn’t really about tennis shoes or commercials so let me get off that. Where I operate, I have to carry E&O insurance and a surety bond to operate. So I’m not phased by that one. I have to renew that every year or business shuts down. If we perform unscrupulous and are found guilty, our initial fine is 10k and a prorated fine continues until the infraction is cleared starting from when it initial happened. If I operate unscrupulously and I don’t get caught, eventually my reputation will destroy my business. I want more regulations. It doesn’t bother me because I operate appropriately. It doesn’t matter to me. But guess what, there are brokers in my state that are doing wrong and time and bad press will naturally eliminate them. Its a natural course. The client is still not exonerate from relinquishing the responsibility for themselves.
Nov 20th, 2007 at 2:51 am
Chris,
I understand you don’t want to be guilty simply by association but that’s the situatuon you found yourself in.
Here is a question for you: have you ever wondered why SEC bars hedge fund solicitation to folks that have net worth below certain amount ?
For the same reason OptionArm/StatedIncome and any other esoteric mortgage products that as shown average consumer can not handle must be prohibited unless you have certain net worth. At the very least net worth will show that individual is capable of doing rational financial decisions (you won’t accumulate 500k unless either your folks are smart and you inherited it or you are smart enough yourself). However any mention of limiting availability of OA or SI products produces outcry from NAMB: blasphemy, mortgage brokers will no longer be able to fleece the sheep, they can’t allow that! Well stock brokerages prohibited from selling certain products in retail too, so a bit of hand holding with product selection on government part shouldn’t hurt you too much either. And please stop insisting that people should know better. Some of us do know better and we really want those around us who don’t to be fleeced. You may not be peddler yourself but you can’t deny abuse of OA/SI sales pitches that were showered on folks who had the least chance of handling it.
Nov 20th, 2007 at 3:55 am
ignorance is bliss but the ability to stand on your own hind legs and somehow muster the facilities within your genetic code to problem solve with a simple solution is priceless. so simple remember the term grant or bailout, the government creates two sets of bonds one that pays the 3% difference and the other that obtains a trillion dollar fund through the capital markets for various investments that have not been touched in the capital markets, such as short selling, long selling, margin trading, currency trading, and commodity hedging. may i point out that the 3% spread would eventually evaporate within 2 to 5 years as the parcels are sold to other investors as those pools are retired. trust me when someone tells u, u are not going to collect but 95 cents on the dollar with no payment then someone turns around backed by the federal government tells u will get all your money back and a 1.5% yield that is insured my man you will drop to the floor and thank every god that created me. also may i add nobody loses their homes or investment property’s, homeownership all of a sudden becomes affordable if one wants the responsibilty to own, irresponsible consumers choose to become tenants they have no time to own, its a choice made by common sense not by finance. if this simple concept is understood choice versus financial capacity the capital markets would stabilize and the united states would become the financial powerhouse that it should be. however you have some very bad policy makers along with some very crooked investment bankers that have made trillions of dollars in the past and continue to do so. they cry poor when they could easily change the market to represent my policy above but no we are in wealth transfer mode with a president and Bernake, i keep forgeting his title, that have the IQ of squirrel and lack the genetic breeding to make sound powerful economic policy that would stabilize and shock the world into economic prosperity never dreamed of.
Nov 20th, 2007 at 4:04 am
grant thats a very poor statement there is no such thing as a poor person anymore as u can see your investments in real estate can evaporate over time. when the prices drop based upon this financial scenario we are in its actually harder for anyone to purchase real estate because of the risk involved, and the fact that the credit markets are somewhat frozen. if u spread the payment over 90 years and compund the payments correctly and seperate some of the interest payments into an interest yield compound account the borrower can actually pay of his or her own mortgage within 30 years and have a small retirement fund left in cash. but no they only do this in finland or scandanivia gosh if we are to round up all the bankers and ask them what they do with the interest they receive on a mortgage you would hear the same explanation with 99 other financial options added to the soup.
Nov 20th, 2007 at 5:02 am
This is getting Old…Back to watching Heros…
Nov 20th, 2007 at 5:07 am
Two More:
Chill Pill
Nov 20th, 2007 at 5:30 am
Where’s Banker008 when you need her?
Nov 20th, 2007 at 5:49 am
Alan,
At one point I was guilty of what you see here. This was early in my career when I lacked the knowledge and the correct passion for this profession. That was 10 years ago. Money will make you do crazy things, but once you have it, a good L.O. should grow in other ways. Some don’t. Its simple as that. If there is regulation out there that makes sense across the board, then I’m all for it. I don’t see it happening though. Some of these exotic loan should be left completely alone. Not just by the client but the L.O. as well. Educate, educate, educate, but none the less some will still slip through the cracks. Because this is a service industry first, bad service will eventually rid most of the trash you are witnessing. You can’t place a monetary limit on loans. That’s discrimination in real estate. It won’t fly. You have to believe there are good originators out there and I sound like a broken record but just as I insist the L.O. needs to improve so very importantly does the borrower. Their lives are on the line from beginning to end. They have to be on guard the minute they enter into this world. I don’t want people beat either and the govt. can only legislate so far. As much as I look out for my clients I still tell them to look out for me. I tell them not to believe what I’m saying. I tell them shop me to see if what I’m saying makes sense or if I’m crazy. As far as OA/SI is concern, if used the right way, and yes, there is a right way to use this product, it eliminates a lot of unnecessary red tape, time and maintains privacy. There are times when you can’t use these products. One of the main checks and balances is lenders will do a six month performance test on current loans. If a broker fails that test, your relationship can terminated. We can’t govern our clients on how they pay but if the same type of product yields the same bad result pattern, then you are gone. You can peddle these products irresponsibly but it cost the broker in the end.
Like I said in a previous response, my clients are mainly repeat referral. That’s my governing tool. Everyone I deal with knows someone else I have dealt with. If you abuse someone, it becomes a rippling affect and will kill your business in the end. I hope and think there will be some legal adjustment on these exotic loans. I really don’t believe they will be eliminated. Again, they make people money. However, when enough people start getting into trouble, that will be the big fix everyone is looking for. Remember, we want the bad brokers and L.O.s out just a bad as you do.
Nov 20th, 2007 at 6:42 am
Can we quit blaming the Brokers please!!!! Nobody has mentioned the fact that on 90% of the loans closed there is a three day rescission period for you to take a closer look at your documents. If you fail to do so, the blame is yours. Everything is in writing for you to see, and when was the last time you seen somebody hide something at the top of the page? I am a broker, an honest one. I believe in educating first and selling second. There are bad LO’s out there, but the bottom line is you have the last word!!! And keep in mind that we are only selling what programs are available to us. If you want to place blame put it on the lenders that decided to offer these programs in the first place!!! Lastly, if you are smart enough to get online and post your comments on here to see, what’s keeping you from googling “Option Arm” or “How do I choose the right home loan?” Truth is most people are lazy and would rather blame someone else than do the research that they have every right to do. I can’t buy anything without researching it on the inter net first. There are plenty of bad loan officers out there, but there are also many good ones too. Take some responsibility for your own actions before you expect others to. We might of put the pen in your hand, but in the end you signed your own name on that line.
Nov 20th, 2007 at 7:44 am
You see, that’s where we differ. I’m saying that OA/SI shall not be advertised or offered unless borrower meets certain net worth threshold because OA/SI carry more risk for borrower. Just like hedge funds can’t pitch their shares to retail. Hedge funds can’t even advertise on their own website unless it’s password protected area for existing clients only.
It doesn’t matter that bad broker goes out of business, he does way too much damage before that.
Mortgage brokers also must be prohibited from making forward-looking statements implying performance or availability of certain products such as “we will just refinance you in two years”. Unless of course mortgage broker is ready to put up money to finance hedge position to guarantee client a refinance.
Loan officers/brokers must pass exam that is similar to securities broker exam and mortgage brokerages must have national registry similar to NASD.
I want mortgage brokerages and loan officers to be regulated as tight as stock brokerages to limit abuse of unsuspecting retail clients.
Nov 20th, 2007 at 12:21 pm
Again, what you are saying is illegal in real estate. And if some normal guy comes into an inheritance or saves his whole life to put it in the stock market and completely loses, then because of his net worth at the time, that’s ok? Its the same thing. A lost is a lost. You still have to protect yourself, regardless of who holds any kind of license.
What about the criminal stock brokers that lure their client to invest in something he knows will bust, just to enrich a fund only to blow up down the road. That happens.
And to the forward looking statements. When you buy a car, you are told about annual maintenance. It preserves or extends the life of your car. Dealers tell you that before you buy it. But if you don’t and your car doesn’t make it pass three years, should you get a new one for free? Should the dealer close down and give you back your money? Well, when you refinance your home and your credit is shaky to begin with and you are told to pay on time for two years, be mindful of who pulls your credit, send more than just the minimal payment on your current bills, don’t make new ones and don’t have any lates and your credit will improve. Well, it will. But if you disregard any and all of that info, you will be right where you are now or even worse. Well, you will. The execution is still on the client. Hedge funds don’t guarantee anything and neither does brokers or banks. Matter of fact, a bank or bank rep won’t even go that far as to advise you on anything. They’ll still refinance you.
You are taking this as if you were duped by some broker. Why aren’t you on the banks ass? They can legally hide what they do. They don’t need to even be licensed, yet they have the same opportunity to do exactly what we do. A promoted teller will handle your business, screw you up and you can’t do a thing about it. The broker is a option for a client a bank won’t even entertain. There are people with low credit and have not one blemish on their report and a bank will stamp denied on their file. They can come to me and I can help them because my options are vast and my criteria in some cases are flexible.
And if you haven’t noticed, lenders and mortgage bankers, not brokers, who lend their own money have to buy them back if they screw up on a large scale. Note the body count on ML-implode.com(189). That’s the result of the companies buying back loans. Does Hedge fund return losses back to their clients?
If you regulate brokers and banks like you want, very few will be home owners. You will have even more fraud, but only in the hands of the few. Still not good. And then your argument will be the millions brokers make, like hedge fund managers.
I am a broker and I must protect my side because we do provide a service and a product to people who otherwise can’t get. If you have a law for every step we take, you reduce that availability to clients who had limited options to begin with.
Nov 20th, 2007 at 1:30 pm
You are so funny you sound like a typical broker who did all of these b/c loans and never made less than 2-2.5 on the bank and now you are trying to blame it on the banks because your lazy ass did a bunch of stated loans on b/c w-2 and put borrowers in homes that they couldn’t afford and now that the &^*& is hitting the fan and they want to regulate you, you are complaining. Well if everyone went by cardinal rule #1 if you are w-2 and know how much you make every week then you have no business going stated. Quit thinking about your commission on every deal and some backbone and tell the borrower it is not about what house you like it is about what house you can AFFORD!!! There is a reason the banks turn these people down!! HISTORY SHOWS PEOPLE WITH BAD CREDIT DON’T PAY!! In 2004 if someone had 560 they would ask what can I do to get my credit better, In 2005 they could get 100% stated so what incentive did they have to fix it and now that they are tighttening the guidelines you want to complain give me a break!!
When we had tight standards we had less forclosures so I say lets go back to it. So go ahead and hit me with the brokers favorite stat “we did 60% of the mortgages last year they have to keep us around” I can hit you with this one “mortgage brokers accounted for 75% of the forclosures”.
Nov 20th, 2007 at 5:00 pm
Shame on you for wasting your time by wasting your time to come here and take your wasted time to leave a comment. Come back and waste your time anytime because I am sure you have time to waste.
Nov 20th, 2007 at 6:28 pm
does anyone here have the genes or balls to have a discussion with me here. no i guess not ofcourse im the smartest one here but that besides the point. the bank are crooked and have made trillions of dollars and are crying poor. they can easily influence current economic policy since their the only ones that have the cash to lobby in congress for votes. your congress, your president, and bernake are a bunch of inbred poorly inferior genetic sock puppets that have no morals and would have sex with their dogs if paid propertly. a five year old painting with crayons could draft an econmic policy to stabilize the mortgage market. i just wish that somehow every person in the US would stand up and question all the econmic policys in front of them. information being presented would show fraud and ignorance of proper economic education. if my policys were enacted the United States would become a financial powerhouse and the world would flourish economically.
Nov 21st, 2007 at 12:39 am
You’re stupid and you sound like a real bitter asshole. Read everything I said first. Then read everything Alan said. Then try and understand what the adults are talking about. My concern is not about the banks. They follow a different law and that law is laden with errors and inconsistencies just like wholesale brokers and lenders. Please read the debate Alan and I had again and then maybe you’ll understand its about regulations and where it works and where it doesn’t and how something should be implemented right now. I’m for regulation and education on both the industry’s part as well as the client’s part. Both have failed. Don’t just jump in on conversation and post things like this. It makes you look REAL STUPID. Direct your hostility somewhere else.
Alan, where are you? Let me respond to someone with some sense. I don’t want to waste time with this dumb ass.
Nov 21st, 2007 at 7:12 am
Chris,
It’s actually interesting that you mention car problems. My close friend had an issue with new Audi for about a year after purchase with constant break downs, I think after 4th of 5th one he submitted paperwork and you know what ? West region Audi VP called and next you thing you know my friend has a check for 50plus large ones (exact purchase amount) and nice letter with apologies. They took the car back and made him whole. Turns there is a lemon law for autos.
You picked a poor example trying to convince me that there is as poor consumer protection in other industries as there is in mortgage brokerage industry.
As far as criminal stock brokers, well, risky product is limited on issuer side which I want to be the case in mortgages too. Lender/securitizer WILL NEED TO BE accountable if product is sold to people out of profile just like hedge fund will get pounded if it is sold to average Joe. It will be forced to cough up and refund the amount if it was sold to retail client out of profile by some broker. Losses or gains are irrelevant what is relevant that risky securities/investment products ARE NOT available in retail without jumping through plenty of regulatory hoops. I fail to see why the same can’t apply to risky mortgage products such as OA/SI, historically these are loans used by people who understand the game of finance and therefore have accumulated mid six figures liqud assets not average Joe six pack with less than ten grands in bank account. Statistic of these loans originated in the last two-three years shows that average Joe six pack can’t handle it and it does pose significantly higher risk of default than vanilla products and since it appears markets can’t fix dangerous consumer lending before putting half the country on foreclosure auction block I say bring on the regulation. If industry can’t do it on its own in TIMELY manner government will have to do it for you. And somehow I think homeownership will be just fine with regulation. It appears stock brokerage or hedge fund industry is pretty much alive and kicking despite the regulations. And I don’t care how much hedge fund managers or anyone makes and what they do as long as they keep fleecing exceedinlgy small number of people who btw can afford to lose couple hundred grands and still eat caviar.
Nov 21st, 2007 at 1:09 pm
I will reply to this comment seriously, and not with the sarcasm that I note in its tone. I was NEVER able to decipher the “Chinese”. Over a number of days, after pouring over the loan and trying to figure out what the hell it said I had a small CLUE! I actually had my suspicions confirmed for me when I called Countrywide and they cheerfully told me that I had a PP that would require me to pay $27,000 of interest if I tried to refinance.
Your claims of lack of maturity and accountability is baseless, as I have a Credit score of 791 and have always paid my debts responsibly and on time. I am an independent contractor and owner of a n S corporation. I gave the LO all of my documents and substantiated income — SHE ADVISED ME that I’d get a better loan if I stated my income rather than prove it. Not knowing better, I actually TRUSTED that she was doing her job.
Nov 21st, 2007 at 1:14 pm
HE is actually as SHE.
I am not mad.
I am devastated. I am scared. I am worried. I am sick to my stomach.
I am feeling Kicking myself for not trusting my instincts.
I feel violated for being taken advantage of.
I feel like prey.
I know MORE NOW AFTER RESEARCHING.
But hindsight is 20/20.
Nov 21st, 2007 at 1:24 pm
What it seems many who have responded are not understanding is that I know NOW.
If I get diagnosed with cancer, God forbid, you bet in a short time I’ll know more than the doctor about the type of cancer I have and how it’s treated — that’s the type of person I am.
I found myself in this situation and then I started doing research.
You know, the only small comfort I’ve relieved is knowing I was not the only one.
Is it that the naysayers who have replied are willing to ignore the numbers? Are they saying that EVERYONE or at the very least a large majority of those who are facing foreclosure all over America KNEW what was going on and were trying to be slick?
Come on????
Is that realistic? It sounds like the old blame the victim mentality and that solves NOTHING.
The broker advised me to pay the minimum payment one month and then the full payment the next month. She told me that was the way to handle this loan. I did this for ten months and I still amassed $12,000 worth of neg. amortization.
Nov 21st, 2007 at 1:38 pm
I usually make it a practice NOT to converse with people who are deliberately not listening to me.
I’ll further clarify, as I said originally, to give voice to those who have been duped!
If the banks are not in the real estate business then they need to modify these loans so that honest, hard working Americans can keep their homes.
They are not doing that and actually actively resist doing that. Why?
I do blame the brokers for targeting a minority neighborhood that is populated by people that they know have limited income, who desperately want a better life and lack the education to make informed decisions.
You claim that I WILLINGLY entered into this loan.
This statement presupposes that I was adequately informed — I WAS NOT.
I was LIED TO.
I was given false information to coerce me into closing a loan that was patently and clearly not the BEST LOAN FOR ME.
I was given inaccurate and inadequate advice as to how to pay down this loan so as to further coerce me into closing it.
I did exactly what the broker advised and found myself in a worse position than when I started.
The broker walked away with a YSP of $14,000 that they DID NOT DISCLOSE TO ME.
Actually, the only way I know that they got this is because I have some documents in my closing docs that SHOULD NOT BE THERE — it seems they should have went with the Title Officer (?)
I did not clearly chose to make the minimum payment due — I could not AFFORD to make the full payment every month.
I told the broker exactly what I could afford and she LIED TO ME and made me believe that I COULD AFFORD THIS LOAN.
I was misled.
The Prepaymetn Penalty was hidden at the top of a two paged document amongst about two inches of closing docs.
Are you suggesting it’s common practice to read every single page of your loan documents at a closing?
I don’t think that’s true but for maybe the most experienced buyers which admittedly I am not.
This was my first home. I was 31 years old when I bought it. It was a blessing and I intend to keep it, and no one, not even this loan broker is going to take it away from me, unless God intends that to happen - that is why NOW I AM SO INFORMED. I am learning from my mistakes.
Buying the home originally was a blessing. Refinancing with CW was the lesson. I am learning it well.
Nov 21st, 2007 at 1:53 pm
“Let’s face it; did you really think that you were so special that the broker was getting you a loan at 1.5% with no strings when everyone else was happy to get 6%.”
This statement is comical, especially from a person “claiming” to be a real estate broker. In all honesty, was the loan EVER 1.5%?
No, it wasn’t. These neg. arm loans are written in a way, purposely to fool the common, hard working American.
“I am going to give you a loan”, let’s suppose the banks