Why do homeowners facing foreclosures blame the banks? (suspect, racism, rating)

[pollyrobin]

Originally Posted by ringwise

Of course we have. But it's a RISK. Not a GUARANTEE.

You want to be bailed out if your risk fails? Great. But you better be prepared to cough up your reward when your risk works out.

And that is why the banks should never have been bailed out
Now that they have, no one can fault a homeowner for what
they do... regardless of a tax payer guarantee for one (banks) but not the other (homeowner)...

[dreamofmonterey]

Originally Posted by pollyrobin

I fail to see your connection e.g. rental insurance/car insurance.

Banks may be in a business to make money - not loose money. But guess
what - so are home owners/investors. No bail out for the homeowner and
only for lender (s) is exactly the reason - HOMEOWNERS SHOULD WALK
IN DROVES...IMO if they are underwater on a mortgage.

Business take risk - that includes a loss as well as a profit.
It becomes an unfair playing field, when the bank is "guaranteed against
loss" by the federal government, but the homeowner is not guaranteed
anything except a bill and a roof over their head

very true. Any adult who has owned a home over 15 yrs knows this. If you are investing in a home, and the market is tanking even after 8-10 years, business wise, u shld bail. A home is a business for any1 who wants some future security. however with the bank manipulation of markets, yes, lots of people (esp in Florida with condos you wont be able to GIVE away) you should walk.

Its the same in S.C .bcs SC is a vacation state. There are no jobs and people cant sell their homes. i know this bcs 2 of my renters are struggling to pay for their SC house while renting here bcs there are some hospital jobs here. NO ONE is buying in certain RE markets. Its simple business.

a car is NOT an investment its a stupid american idea that it has value. it depreciates 50% after the first day you drive it. Finanacing a car is stupid.

[brentwoodgirl]

Originally Posted by pollyrobin

First, selling anything was a Big problem after the bust, regardless of
equity in a property.

He would have had to have had a second mortgage or already in
foreclosure for the bank to have that kind of control...

FBK stated after the boom and then the bust, employers laid off and he lost tenants (they were paying the mortgage on this rental property) - that's why I'm thinking he was already in foreclosure
when he tried and found a buyer in order not to loose any previous equity
he had already gained in a multi rental unit over the last 19 years.

Once in foreclosure - a bank can do what ever they want.

We bought a house that was going into foreclosure in 2008. The owner owed about 1/2 what the house was worth. For some reason, she moved out and quit making the payments. The bank started foreclosure procedings. We found out about it, and offered her $200K less than the house was worth, which was still more than she owed. She accepted, but we had to close within 7 days- the foreclosure auction was in 14 days and she wanted some breathing room. We purchased the house, the remaining mortgage and fees were paid off. Auction was cancelled.

The bank has a say if you are trying to get a short sale. After foreclosure, they own they house. You don't find buyers for the bank after the foreclosure.

BTW- I completely agree that the banks should have never been bailed out. I think banks and homeowners both have to be responsible for bad loans. People should not buy houses they can't afford, and they shouldn't sign for mortgages they don't understand. And banks should not be giving out risky loans.

[MissNM]

People blame the banks because they are naive and believed what others told them:
Finance companies - they are financial experts and providing good financial advice
Realtors - home prices will only go up, buy as much house as you can possibly afford
Friends - they can afford an expensive home on a similar income, you can too

Here is what people should believe:
Most finance companies will tell you anything to make a buck.
Realtors' commissions are based on sales price - the higher the price, the bigger the commision.
Chances are, friends who are struggling with their finances won't admit they are in over their heads. Y

My new rules:
Only buy if you plan to stay for at least 5 years.
Buy what you need for today and what you can later upgrade/update for your needs in 5 to 10 years,
Set a comfortable maximum amount for mortgage, HOA, taxes, insurance, and utilities and don't exceed it.
No variable rates, and nothing over 30 years. Only exception is when you are in your last home, your are retired, and you don't want to leave the house to anyone.
Refinance only to pay it off faster with a cheaper rate.
Never take money out of your house unless you are in your last home, you are retired, and you don't want to leave the house to anyone.

[Submariner]

Originally Posted by bentlebee

... The bank would have agreed to sell the home if you brought money to the table but that was not your intension ....

You think that if I had paid the bank more money, they would have agreed to let the property sale?

I have no idea of how much money they were targeting to get from the bail-out.

From the lawsuit I must assume they were hoping to get double.

To sell a $100k property: first get a buyer to pay $100k, then the seller kick in $100k? Is that what you are suggesting?

I have bought and sold a few properties over the years. So long as the buyer has the cash, and agrees to cover all fees, I do not see why the seller needs to kick-in the same amount just to pacify the bank.

How much should be paid to a bank for a $100k note? $250k? $500k? How much?

... you can twist and turn it anyway but it comes down to you not making enough money to keep your business and it wasn't your homesteaded property ... did you praise the banks all these years when you made a profit or thought the value was so much higher ... no now the banks are to blamed and the casino's for ruin your value ... you should have sold when the market was high .... just dumb business plan and that is what almost everybody is doing ... BLAME OTHERS, WHILE THEY HAVE TO BLAME THEMSLEVES!

I am not twisting anything.

I have not suggested anything about value loss on that property.

When I had it up for sale, it was re-assessed. It's assessed value has more than it's outstanding mortgage principle. Which was largely why it had so many willing buyers.

[Submariner]

Originally Posted by Darkatt

I call BULL. The bank doesn't need permission for you to sell. If the amount of money to change hands was enough to pay off the mortgage, get a payoff amount, take the money, pay it off, and deed the property to the buyer.

I have never seen a mortgage with a early payoff refusal note. What does the bank care what you are going to do with the property after they have been paid off.

So, if you have an offer, and the offer pays the property in full, you get your attorney to write up the contract, accept the payoff amount, take it to the bank, pay off the property, get the deed, and sign it over to the new owner.

Done deal.

I agree.

[Submariner]

Originally Posted by brentwoodgirl

FBK- did you take out a second mortgage on the property?

That's the only scenario that makes sense. If a person is making full payments every month, then the orignal loan should be almost halfway paid off by now. Unless the housing market in that town has fallen off to half of its 1991 values, then it shouldn't have been a problem to sell it for the amount owed. That wouldn't be a short sell and wouldn't require the bank's approval.

We did have a second mortgage.

The primary mortgage holder began the foreclosure before we got the offers to buy.

The price that was asked was the sum total of what we owed [it included paying off both the primary mortgage and the secondary mortgage]. At the time, it was re-assessed and the assessed value was far more than what we were asking. We were asking for just enough to pay what we owed. So we could walk away not owing anyone anything.

The second mortgage holder is abiding by whatever the primary says.

I have no beef with the secondary mortgage holder, they have not been hassling us. They would have been paid off in full if the sale had gone through.

[Mircea]

Originally Posted by Freebird2007

I mean, aren't they the ones who bought these homes that they couldn't afford? Why do they get pissed off at banks when they are the ones unable to make the payments?

Because they are stupid and ignorant.

There are certain federal banking laws that must be followed. For unsecured debt, such as a credit card, a bank has no choice. It must close the account and write off the debt after 180 days. That is not an option for the bank, it is a requirement.

For any secured loan (ie collateralized loan), federal banking regulations require the debt to be charged off at 120 days.

That is why cars are repossessed and homes are foreclosed upon at 120 days. It is not up to the bank to decide; it's a federal banking regulation with severe penalties for non-compliance.

Originally Posted by forest beekeeper

I am being foreclosed upon.

We bought a 'Multi-Family-Residence' [a single building with multiple apartments] in an area near to a Navy base where we knew that I would likely be stationed many times.

I put the property up for sale. Our realtor found three willing buyers, who would each pay off the loan. I did not price it to make any profit. I only wanted to get out, get a buyer to pay my outstanding principle and take it so I could wash my hands of it.

All of this was submitted to the bank. They could choose which buyer could buy the property.

The bank refused to allow us to sell.

It sounds to me like you weren't selling the property, rather you were having someone else take over the mortgage (which is not the same thing and the bank can deny that for any number of legitimate reasons).

Originally Posted by forest beekeeper

I filed bankruptcy.

Now after my bankruptcy has been finalized, the bank still calls me to pester me, every time I refer them to my lawyer.

The bank still sends me letters. They have refused to acknowledge my bankruptcy. I divert all of their letters to my lawyer.

That is potentially a violation of the Fair Debt Collection Practices Act for which you are entitled statutory damages and real damages. When you file bankruptcy, the Bankruptcy Court issues a stay to all creditors and collectors signed by the judge.

The bank, as creditor, may not be liable under the Act because a creditor is not a debt collector for purposes of the FDCPA. However, if a 3rd Party is attempting to collect for the bank, then that party by definition is a debt-collector regardless of the 3rd Party's relationship to the bank.

Some States, like California, have their own version of the FDCPA and State laws often (but not always) define creditors as debt collectors (California and Texas do for example).

I do not know if Nevada has its own laws or if Nevada defines creditors as collectors under the law or if creditors are liable, but your attorney should know that, and should also know if the party attempting to collect is a debt collector as defined under the FDCPA.

Originally Posted by SourD

No, it's poor management.

Carrying debt is unwise. For a multi-family dwelling the mortgage should have been doubled-down or additional payments made on principal, and refinanced after 5 years on a 15-year mortgage with lower payments.

That's one way to make the property profitable (and the easiest way).

Originally Posted by ringwise

Question - if you had made a huge profit after all those years, would you have shared it with the bank? Just askin'

Ooops. That "huge profit" should have paid off the mortgage early.

Originally Posted by Darkatt

I call BULL. The bank doesn't need permission for you to sell. If the amount of money to change hands was enough to pay off the mortgage, get a payoff amount, take the money, pay it off, and deed the property to the buyer.

I have never seen a mortgage with a early payoff refusal note. What does the bank care what you are going to do with the property after they have been paid off.

I never heard of one either. You can always pay a debt off early. There might be penalties, but you can pay it off.

Originally Posted by Freebird2007

we have an early payoff clause on our bank of america mortgage and they will not let us get rid of it without paying $7500 penalty

Why did your real estate attorney allow you to sign something like that?

Originally Posted by pollyrobin

Many folks during the height of the "housing boom" were bombarded with solicitation from banks for home equity/refinance - lower interest rate type "second mortgages" based on equity.....

Yeah, so what? What people saw was "money for nothing and chicks for free" to keep on "Keeping up with the Jones."

They made bad choices.

Originally Posted by jambo101

And following your logic where do you suppose Americas auto industry would be today?

Exactly where it should be. Dead and gone.

The Laws of Economics cannot be violated, not by you or god or Congress or anyone. Economics is self-correcting. Whatever would have happened will eventually happen in the end. There's no way to win.

Three of those Laws are:

1] You must make a product or provide a service that is in demand; AND

2] The product or service offered must be of the highest possible comparable quality; AND

3] The product or service must be offered at the most competitive price.

Violate just one of those 3 Laws and you will ultimately fail. There is no stopping it. You can bail out industries that violate those Laws, but they will eventually fail if they continue to violate them.

That is why you are unable to compete globally, and why US corporations are off-shoring jobs; and why you will not be able to compete globally for 50-60 years because you violate Law #3.

It is totally impossible to sell your products globally at a competitive price at the wages that are paid to Americans.

Originally Posted by jambo101

Or had Wall st. not got a bail out where would Americas global financial credibility be today?..

Where it should be. I'm sure there are other banks that are not on Wall Street who can step up to the plate and hit a grand-slam.

Originally Posted by ringwise

The auto industry should have been allowed to go under. That's called a Free Market system.

Wall St. should not have been bailed out. That's called a Free Market system.

That's how it is suppose to work.

[jambo101]

Quote:
Originally Posted by jambo101
And following your logic where do you suppose Americas auto industry would be today?

Originally Posted by Mircea

Exactly where it should be. Dead and gone.

Where it should be. I'm sure there are other banks that are not on Wall Street who can step up to the plate and hit a grand-slam.



That's how it is suppose to work.

So you would happily watch the country go down the drain and do nothing to prevent that outcome because according to you thats the way its supposed to work?.
If my ship was sinking i think i'd be bailing as hard as i could..
I'm sure you wouldnt be so convinced of your ideas if you were one of the millions who rely on the auto industry for their livelihood or a worker in one of the many global companies in America who rely on exporting and importing products to and from other parts of the world..

[pollyrobin]

Originally Posted by Mircea

Yeah, so what? What people saw was "money for nothing and chicks for free" to keep on "Keeping up with the Jones."

They made bad choices.

Since another poster thought he
only had an original mortgage since it was 19 years old.
I was just pointing out the possibility that he got a second mortgage -
which turned out to be the case.
Banks made bad choices. Next...