The Bank Wants Their Money - And They Are Entitled To It

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I got behind 5 months, in months of 01/2010 to 05/2010. Home was paid cash for in 11/2000,took out a first mortgage in amount of 75thou.House went into default, I sent in 3 thou in 05/2010, and another 1200.00 before end of 06/2010. They sent the money back, said loan was in default, could not accept monies. In June started process to modify loan, in the Making Home Affloan. Original loan was 8.25%. During time was being reviewed for the mod. loan house went to auction 08/03/2010, was postponed. It took bank from 06/2010 to 11/23/2010 to disqualify us for loan because we owned over 200,000 in stock. A few more auction postponements, we were in review for the loan. Did not receive notice did not qualify for that loan mod. till first week of 12/2010. Contacted bank, they said had other modification loans,(in house loans) sent in more financials, this was 12/06/2010, found out new auction date was 12/07/2010, they postponed sale, was in review for loan restructure. Next thing I know called them on 12/20/2010, told me was an aution date for 12/23/2010. I was told was too close to sale date to file paperwork for a new loan mod. to keep calling back to see if got a postponement. To make a real long story short, 12/23/2010, came sold our house valued at between 500,000 to 600,000 dollars for under 97,000. Then today 12/30/2010 received 2 letters from bank telling me want to work with us, keep us in our home and referenced our phone conversation on 12/23/2010, and asked for me to send more financial info, they have many programs to restructure the loan. I just want people to know what the banks are doing. If you could get this story out there, someone need to know what happened to us, ours was a rare case, but people need to know.

The salient points that stick out were:

-They owed a base amount of $75k which became $97k

-They had $200,000 in stock so they were denied for a loan modification

Given these two facts, there is only one conclusion possible: They chose not to make those payments.

Maybe it would have been uncomfortable in some way. That's simply not relevant. They voluntarily borrowed the money. Based upon their representations, the lender agreed to loan them the money. One of the conditions was that if they did not repay the money, the lender would have the right to the security interest. These people chose not to pay, and the lender exercised that right.

Taking this right away from lenders would completely gut the housing market, because nobody would willingly make a loan ever again. Keeping in mind that The Mortgage Loan Market Controls the Real Estate Market, this means that housing prices would crash, and only people with the ability to pay cash would be able to buy real estate. You want to know what that would look like, go back to the late 19th century tenements of our old industrial cities. It's not a pretty picture.

I never like to hear about someone losing their property, but someone who had the money and chose not to spend it to prevent foreclosure doesn't generate much sympathy from me. Yeah, there are people working the system who haven't made a payment for two to three years. That doesn't mean it's a good thing, and that doesn't mean it was right. That lender loaned the money in expectation of having it repaid with interest. If they could not expect repayment with interest, they'd never loan it out again. If they didn't have the right, in the final analysis, to foreclose in pursuit of recovering what they should have been paid, not very many would make their mortgage payment (even fewer on time and in full), and once again, nobody would ever loan money for a mortgage ever again.

Caveat Emptor

Article UPDATED here


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This page contains a single entry by Dan Melson published on July 21, 2012 8:00 AM.

Eminent Domain Abuse: Putting a Stop to It was the previous entry in this blog.

The Doctrine of Delaying The Moment Of Truth is the next entry in this blog.

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