Posted on 01/31/2015 6:50:08 AM PST by dynachrome
When they moved into the house in November 2005, Kofi was earning $82,740 as an IT consultant for a government contractor, and Comfort, then 43, was making $30,000 as an administrative assistant. But in the overheated mortgage market of the time, they said everyone told them that they could buy a $600,000 house.
They made a $60,000 down payment and all their mortgage payments for more than 2½ years — through September 2008. But the house was financed with subprime loans, which reset to higher rates after short time periods, creating what are known as “shock payments.” The Boatengs said they could not make their new higher payment, and, in the middle of the 2008 mortgage crisis, they could not refinance.
(Excerpt) Read more at washingtonpost.com ...
Not a lawyer, but seems pretty clear fraud, and fraudulent of a magnitude to warrant a withdrawal of whatever green card/citizenship status they’d earned. That is, if we had a properly managed government.
That’s called a liar’s loan.
Concealing material facts from the lender that could affect approval of a loan is a felony crime.
Yes, its criminal fraud to sign loan documents where you conceal facts that should they emerge, show you are in fact ineligible for the loan in the first place.
I’m surprised the Boatengs were not indicted and prosecuted for obtaining a liar’s loan.
Perhaps you have some knowledge and can answer my questions:
I live in a semi-rural area that has quite a few vacant houses. I assume that most of them went into foreclosure at some point. There is one on my street that was foreclosed upon. Many of these, including the one on my street, have sat vacant for a number of years. These are not high end properties. Modest houses on rather affordable land here.
Questions:
1) Why does the bank just leave the property to rot instead of trying to sell it?
2) Why does the bank not pay for electricity so that the sump pump will, at least, keep the basement from becoming a swamp and a mold factory for the rest of the house?
I am just baffled by this phenomenon. Thanks for your time.
Sarc/
We had plenty of that as well, where people in cahoots were selling and drawing false equity from overvalued homes; in the end, the banks ended up with homes worth a lot less then their paper value, the last borrowers’ information, and the rest of the links in the chain simply walked away with the money - completely legally.
You must not live on the east coast. I sold my 1800sf home in Michigan at a huge loss in 2010 for $136K ($50K less than I paid for it) and bought an older tract home at 12oo sf for $170K.
Really feels great to move back into an overprice starter home.
I understand the sentiment though. I flat out refuse to be house poor and have zero sympathy for them.
According to the article they have not made a single mortgage payment for over six years.
Hard to feel sorry for someone who has been living for free in a $600K home since Bush was president.
I’d have loved to have lived six years rent free in my condo.
Most people in America can’t do what they did.
When I was in graduate school in the early 90s, even though I had five part-time jobs (only way to make it in the People’s Republic of Tucson), perfect credit, and had saved up 10K for a down payment, I as a single female got laughed out of every mortgage office. And ordinary (albeit needing some cosmetic updates) homes in decent neighborhoods were easily 60-80K back then.
I eventually got into a house by cofinancing with my parents, later in the 90s. Bought them out within a year and remain in the same house.
It’s disgusting to me what riff-raff can “buy” houses, especially after I was continually humiliated by banks and mortgage lenders. And how unfair that these Africans have not made any payments in six years.
Perhaps because if the bank sells them they eat a loss, but if they hold on hoping for the market to recover (or somebody else to just want the land - which would explain the lack of electricity) they might get something for it.
We immigrated here in 1952 and that was the law. Immigrants had to have the promise of a job, and American sponsors who would cover their expenses (medical, housing, etc.) for the first five years should the immigrants require assistance.,.near impossible requirements. Fortunately, my Dad, brother, and mother arrived at ll:00AM and all hit the streets, on foot, by noon looking for work. I went to the home of our sponsors (I was 12). Both parents and my brother never arrived home until after 5:00PM, all getting jobs and being employed that same day. And fortunately, I’m 75 now, none of us were ever a burden on our sponsors or the government. But it was a different America then.
Never, ever, ever finance a house with an adjustable mortgage. If you cannot afford a fixed rate mortgage, wait until you can.
Who is stupid enough to borrow or put 20K into Mary Kay pyramid scheme, much less 40K
My understanding, which is very limited, is that the houses stay on the books at the bank near their original value. If the bank sells the house at a huge discount, that loss goes on their books and the banks balance sheets look much worse. ( and who knows if some of these banks would be insolvent if the true value of the house they own were on the books)
I agree! This is all we read about in 2012. These stories are ancient history now.
In law school back in the saner days, they taught us no more than 28% of monthly income should go to the mortgage payment.
You fall into my category of what responsible people do. You stayed under $250,000.
Same story with my parents, about your age. I’m first-generation American. After Ted Kennedy purposely destroyed the country in 1965, by discriminating against hard-working Europeans, who had to speak English, know the Constitution, be healthy, be responsible, have sponsors, etc., nothing has been the same.
Back when adults ran this country and our banks, there would be “income verification” for loans.
Those standards were loosened as desperate measure were employed to bolster a housing market being destroyed by low birthrates; foreigners aren’t trafficked here to work anymore, but rather to CONSUME - in housing, classroom seats, and businesses.
At the time they figured they could afford the payments and then lower then by refinancing to a fixed rate mortgage.
The liquidity crash in 2008 put that to rest when eligibility for refinancing all but dried up.
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