The drug correlation is a bit off base…. in reply to your analogy here is another perspective
-actually if you educate the buyers and make punishment harsh enough for the crooks then you would have far less crack sales. As far a demand you will always have a percentage that will want whatever can get them their fix.

In housing the single biggest issue seems to be the complaint of “i did not know” “I was tricked” ” I was offered something that was not the right program”

If most of the people in trouble purchased the last few years then I am not sure why they did not educate themselves. We are in an era of the Internet and can research almost anything. So a simple Google of the program the person was not familiar with would give many results of the pros and cons of what one is getting into. It seems the homeowners on this site can use a computer to post their complaints.

I am not bashing the people who were swindled…just asking the question- why did they not research the program on the web?

Those who did trick people and swindle homebuyers then I am all for punishment of those people…I just don’t believe that this was the case most of the time.

95% of all mortgages are not delinquent and currently paid on time. The FBI arrested 300-350 brokers after 4 months of investigations…

if almost all originators were hoodwinking homeowners shouldn’t the default numbers be much higher?? Percentage wise…the actual number of foreclosures is higher than in the past but more people bought homes. I am not a homeowner hater, i just do not understand the contention that most homeowners were tricked into something they did not understand.

I do not think 300-350 that were arrested is the majority of originators in the country.

I feel bad for those few who did get tricked and had dishonest people they were dealing with but as the above story indicates, there are homeowners who did know what they were getting into and are gaming the system. Out of the 5% of mortgage defaults I would be curious how many of them were actually tricked into a mortgage.

Just my thought on the issue.

http://online.wsj.com/public/resources/documents/complaint-WSJ20071228.pdf

You keep falling back on the tired old excuse of “the paperwork was overwhelming”, “they pushed me to sign it”, “if I had a 2nd or 3rd opinion, they would be corrupt”…..give me a break. You made a poor business decision and bought over your head. It is really that simple, and the sooner you take personal responsibility for your decision making, the better off you will be. In your case, it sounds like you should have consulted at least 3 trusted friends/associates before you made this decision. I hope you have learned a valuable lesson, and won’t let this happen to you again. IF YOU CAN NOT AFFORD IT, OR ARE NOT SURE YOU CAN AFFORD IT, DON’T BUY IT!!!!!!!!!!

you stated it so eloquently – the exact problem some of us are facing… now for those people who keep stating it is only the borrowers responsibility and they should have gotten a 2nd opinion theory…. there were contracts with deadlines, $deposits in escros to lose and that 2nd or 3rd opinion might have been as corrupt if not more than the first person you trusted with their expertise & professionalism to guide you through this process.

I for one remember getting hundreds of pages at closing and could barely understand some of the ‘lingo’ when asked I trusted what the title person & broker where saying – ( i mean shouldn’t they know, they do this for a living as their profession)-

to: JRB you posted on Jun 19th, 2008 at 5:20 pm
the analogy you used was perfect !
Some borrowers I will accept were just as corrupt (but some of those borrowers were realtors, brokers, appraisers, a/e’s purchasing 2nd homes etc to flip)

for the rest of the borrowers that are truly going through hardship and were mislead, and did experience predatory lending – you are not alone ! we need to fight for what is right.

A couple of questions:

1) How is it that you compare “crack” (illegal) distribution to mortgage sales (legal)? In our society, people have CHOICES and OPTIONS. If they make poor business decisions, who is to blame?

2) Just because qualifying for a loan was “easy”, does that mean that someone should apply for one?

3) Is there some “law” in America that REQUIRES people to purchase a home?

WAKE UP AND SMELL THE COFFEE!!!! When you are making the largest financial decision in your life, you better research it prior to signing a BINDING note and DEED OF TRUST! I am saddened by the irresponsibility of consumers in our society. No one was complaining about the terms of their loan when home prices were rising, however, now that they are falling, everyone is crying “foul” and blaming others for their poor decisions. Unfortunately people often follow their government and parents when making decisions…..that is why we are now a DEBTOR country and society. It is really depressing that we are soon going to be a socialistic society primarily due to lack of personal responsibility…..it is just very depressing that the person who pays their bills on time is going to have to BAIL OUT those that made irresponsible decisions. My advice: short the stock market, and sell your house NOW!

1. Is it a requirement that people in the United States purchase a home?

2. If one decides to purchase a home, would it not make sense to read the documents in detail (especially the documents that are notarized and recorded) to ensure that they understand the type of loan they were applying for?

3. Why do you think banks specifically require a buyer sign documents in front of a notary and then record the signed note and deed of trust (or mortgage contract)?

4. There are basically 3 types of loans:
a) a fixed rate note…..the payments are fixed for the
determined period of the note (30/20/10 yrs.) SIMPLE.

b) a “hybrid” adjustable loan that has a fixed payment
for a specified time period (i.e. 2,5,7, or 10 years’)
These loans will then adjust to a SPECIFIC Index with
SPECIFIC margin (spread) over the index, and then
adjust periodically thereafter (i.e. every 6 mo/12mo)
These loans also have a LIFETIME CAP which is
SPECIFIED in the note. These loans may have an inter-
est-only option as well, whereby the buyer pays NO
PRINCIPAL until the loan resets. A LITTLE MORE COMPLI-
CATED.

c) The Option ARM Adjustable Mortgage that has a fixed
PAYMENT (NOT A FIXED INTEREST RATE) that adjusts on
a monthly basis. The underlying rate changes monthly
based on a SPECIFIC INDEX, and a SET MARGIN. Each
year the buyer’s MINIMUM PAYMENT generally will in-
crease by 7.5%. The underlying ACTUAL payment still
adjusts monthly, and there is also a SPECIFIED Life-
time CAP on the note. If the buyer consistently pays
the MINIMUM payment, there will be deferred interest
that is added on to the principal at the end of the
year. These loans also have a maximum amount of
deferred interest that is allowed over the initial
loan amount (usually loan can not go above 10% its
original balance). MORE COMPLICATED.

Now that we know what the 3 types of loans are, why in the world would someone not get a 2nd, 3rd or even 4th outside opinion prior to accepting terms on the largest financial decision they will make in their life?

5. Why wasn’t anyone complaining about the terms of their loans a couple of years’ ago when property values were booming?

If someone can answer these questions with a coherent concise answer, I would like to hear it??? Maybe, I am one of the only people in this society that believe in personal responsibility. Sure, there are times when people lose their jobs, and there are other extenuating circumstances, however those instances are generally rare.

Let’s look at the REAL issue. Just because someone is trying to “sell” you something, does not mean you have to “buy” it. That is why we have a free society (for now). It rewards people for making intelligent financial decisions, and it punishes people for making unwise decisions. (take a look at the number of foreclosures, bank failures/stock declines, investment blow ups to see who made POOR BUSINESS DECISIONS). As far as the first line of defense in ANY business decision…..LOOK IN THE MIRROR!!!!!