I wish I was in the position this woman started in... having a paid off house.
Sounds reasonable...</sarc>
Yes, that was my first thought. What a dumb thing to do.
She wants to pay $600 a month on a $200,000 loan...
Well at an interest rate of ZERO it would just under 28 years to pay that off...
What the hell did she expect? Free money?
While true that she probably shouldn’t have pulled $200k out, or any, the fact remains that people ARE being mislead on loan mods, which, are hard to get and only being offered to people who are not paying.
The other thing I noticed...based on the $200k loan size, her payment increase wasn’t due to the “rate going up” as much as that her introductory negatively amortizing payment period was expired...and she had to start paying back principal.
Feds Cite Schumer In Collapse Of IndyMac
http://www.freerepublic.com/focus/f-news/2152809/posts
Flowers, Soros, Michael Dell team to buy IndyMac
http://seattletimes.nwsource.com/html/businesstechnology/2008583219_apindymacsale.html
caveat emptor doesnt cover Con men and grifters...
It’s astonishing how many people just have no clue about personal finance and economics topics. It’s just not that hard. Maybe something needs to be done at the High School level, to give more people some basic clue about how to deal with basic financial decisions.
This person clearly didn’t know bad advice when she got it.
There’s a relative of mine, some sort of step-aunt or something... she and her husband both have had good, well-paying jobs. Before the big crash they were into a third mortgage on their not-yet-paid-for house— all of that money borrowed went for vacations and cruises and other travel. Every penny they made was being sunk into those loans. They had no savings anymore, and of course massive credit card debt. They’d buy lavish presents for themselves on their cards, and then merely pay the minimum payment... never touching the principal, which just grew, and grew...
I simply don’t understand it. How can anybody be that big of a financial disaster?
See what real estate does over the next 30 years, as we Baby Boomers croak in a thunderous avalanche of rottenness heard across the universe. It’s going to get interesting.
Granted, a 30-year old adult should have the mental acuity not to get caught in such a trap. But they do, anyway. But when someone 64+ trusts a loan officer to find a loan that stays within her SS payment, and that trust is broken by making an ARM with big points for the officer, that is elder abuse.
Likely the loan officer didn’t inform her there was an empty MBS trust he needed to fill up because they had already sold the certificates to the investors. As a result, her loan went in late, if at all, and so the trust never acquired the beneficiary interest and collected her payments anyway. When the loan defaulted, Fannie Mae paid it off at the original loan amount, then sold it back to OneWest, who is collecting on it a second time through foreclosure.
If you don’t believe or understand what I just wrote, then you don’t deserve to own a home, either.
That's right. And We the People have no obligation to help you.
She signed the papers to get $200k. She had every opportunity to read them...and chances are at least 99% she knew the risk she was taking. The other 1% could be pure delusion.
but we can bail out the banks with trillions tax payers dollars. All seems fair to me /sarc
The sad truth about those with paid off homes, is that they take out equity loans to update their worn out homes, or just to try to make it between social security checks. Now THERE’S a subject to talk about... Social Security - a nearly bankrupt program that was run into the ground over 15 years ago when money was taken out of that fund and never put back. Now seniors and the now aging baby boomer generation are going to suffer in the near future as that program will collapse in on itself. What does this have to do with the subject at hand? Simple - they cannot keep up with payments with dwindling incomes so these loans go into default and their now paid off home is going into foreclosure. A 70 year old woman is going to lose her home she bought in 1970!!! Paid for it through years of work, now will have nothing to show for it. THAT IS PITIFUL! OUR GOVT SHOULD BE ASHAMED OF ITSELF! Instead, they are not looking too concerned about the rise in foreclosures, the shrinkage good available jobs and a failing social security system. THIS IS SAD! Grandma’s and grandpa’s all over are living in homeless shelters that are already over capacity. At no time in U.S. history since the Great Depression has our economy been in tatters like this.
No sympathy.
Next.
Sounds like a “reverse mortgage” might be the only option left to her at this point. Her family won’t get the nice beach house, but at least this way no one will be buried by a bad mortgage later on. Yes, it’s another loan on top of a bad one, but in the end, this might be a way to stick the bank, since they’ll be left holding a much-devalued property in the end.
So what was the 200k for, where did that money go?
This lady should ask for the lien documents applying to the note. I’m sure no legal documents exist since her loan/mortgage was sold to wall street. Then she should just stop paying on the loan. Then go to court and ask for a quiet claim of title in her name.
” in 2005 following the advice of a friend, Hall took out a $200,000 loan on her beach house, which was valued at $400,000”
Because she thought that would push the value to at least $700k and she could sell and profit even more from the paid-off house before the higher payments kicked in. She was 64 when she played this greed game—a year from collecting her SS. She had no intention of ever making the higher payments.