[Kolokotronis]

We began seeing this in our law office about a year ago. All of a sudden people started coming in with foreclosure notices from loan companies we had never heard of with principal balances equal to or in excess of any reasonable FMV of the real estate securing the notes. When we looked at the financial situations of these people, we saw huge credit card debt and usually previous personal bankruptcies. In other words, no one in their right mind would have lent these people 10 cents! Quite literally all of these mortgages were written with "internet loan companies", through "mortgage brokers" or resulted from junk mail solicitations, the type that send a "check" in the mail offering no closing cost mortgages to "pay off your high interest credit card debt". Some of these people keep getting solicitations even while in foreclosure, often from the foreclosing mortgagee!

Invariably, the closing documents are filled with RESPA violations, the assignments or mortgage recordings screwed up and the notices of default and right to cure defective. HSBC is a prime offender in these areas. I am convinced that they run that business with a bunch of 12 year old illiterates!

The latest trend is for the foreclosing mortgagees to contact the debtors and try to convince them to keep their homes, even offering to rewrite the mortgages in an effort to avoid ending up with the properties which cost them money to carry and which they seldom if ever can sell for what they are owed.

None of this excuses the financial irresponsibility of the debtors, but these lenders are getting exactly what they deserve for being so abysmally stupid with other people's money!

The advice we give our clients is stick with your local S&L or credit union. You know them, they know you and if its a mistake all the way around to make a loan, the bank will tell you that. If the loan is made, it will be made right the first time and if something goes wrong there will be a local loan officer to talk across the table to.

[wizr]

Amen. To your tagline, also.

[nascarnation]

excellent insight
thanks for the post

At my age I'm from an era when getting a mortage was quite a rigorous process. Now it appears to be about as difficult as purchasing a lottery ticket.

[freedom moose]

You know them, they know you and if its a mistake all the way around to make a loan, the bank will tell you that. If the loan is made, it will be made right the first time and if something goes wrong there will be a local loan officer to talk across the table to.

This is good advice here on the other side of the world too, where we're about to have some similar problems!
P.S. Your tagline is a traditional Greek Easter greeting right? There's another one that ends with "Yes Lord He IS the Christ" in translation at least...i think...or so I've been told.

[xzins]

None of this excuses the financial irresponsibility of the debtors, but these lenders are getting exactly what they deserve for being so abysmally stupid with other people's money!

I agree wholeheartedly that those who extend credit to bad risk borrowers, college students, and the very young deserve to eat their mistakes. There should be no rescue for those who loan to risky borrowers.

On the other hand, there are extremely reputable independent mortgage brokers who use the very same ultimate mortgage lenders as do banks, savings/loans, and credit unions, who will often carry a loan intially, but then sell that loan out to a firm that specializes in mortgages.