What is a "Foreclosure Victim"?
 

Isn't it just someone who signed up for a mortgage that they could not afford, knowing FULLY in advance that their interest rate could change at any time? I purposely did NOT get an adjustable rate mortgage on either of the two properties I have owned because of this, and live in a more inexpensive house than I could have purchased if I had done an adjustable rate mortgage.

Why should the government help these people at all, when it is their own fault they are in this situation in the first place?

Re: What is a "Foreclosure Victim"?
 

I think a foreclosure victim is the cousin of the man who left his keys in his car and doors unlocked and got upset when his car got stolen or.. brother of the man who never paid his credit card bill and then got upset when the card was shut off???? Maybe?!

Re: What is a "Foreclosure Victim"?
 

It's not that cut and dried bro.

There are some people thought they were getting a fixed rate, and didnt even know it was adjustable. I know of one particular case in which a woman was given a mortgage that was adjustable, but "fixed for 3 years", but it was explained to her as being a "fixed rate", not that it was adjustable after that 3 years. Near the end of the 3 years,her bank sent her a letter notifying her that her rate was going to adjust in 90 days ,and of course she was perplexed. When she called the guy at the mortgage company who sold her the mortgage, he didnt work there any more, and she was on the hook.

There was a lot of fraud in the business, and a lot of people who were elderly, minorities, had bad credit, or just werent financially savvy were easy prey to a lot of deceitful mortgage brokers. Yes, the person signed the paperwork, and are resonsible for whatever they sign, but often they werent really explained what they were signing, and they were taken advantage of.

So yes, some people were irresponsible and bit off more than they could chew. But there are many who were also deceived, and could properly be considered "foreclosure victims".

Re: What is a "Foreclosure Victim"?
 

I remember being taught to read a contract completely before signing it and if you don't understand something to pay a lawyer review it with/for you.

Re: What is a "Foreclosure Victim"?
 

Yes, yes, we know.
There are a lot of things that we should do in a perfect world, that we dont do.

And there are some who take advantage of this, for their own financial gain. And that happens a lot in the financial services industry.

Re: What is a "Foreclosure Victim"?
 

Not everyone who has an adjustable rate mortgage bought a house that they could not afford. And I would dare say that most people who have these mortgages knew the interest rate would change, they just didn't expect it to change so drastically.

Re: What is a "Foreclosure Victim"?
 

So they took a gamble and we get to pay for it... I get it.

Re: What is a "Foreclosure Victim"?
 

That's exactly it! I heard it explained last night and there were investors that were taking this gamble.

Re: What is a "Foreclosure Victim"?
 

I do understand that some people were deceived, but in this day and age people cannot be so trusting... this isn't that "perfect world" TRFRANCE mentioned above, and none of us live in Mayberry or on Walton Mountain. I understand that, but obviously those people who did not review their contracts properly did not.

Re: What is a "Foreclosure Victim"?
 

Caveat emptor!

A few years ago, we got an interest only LIBOR loan. We planned to make more than just the interest payment and bring our principle down. We knew the that the loan would "convert" to an ARM at the end of the original term. No problem. When that time came, we got out of that loan and into a fixed rate loan. We used the tool to help us than we got out.

I understand that not everyone is mortgage savvy, but most of the people bought houses way above their means and yes many homes were way over valued as well. But I do not expect the Gov't to bail me out of a bad move on my part. If they want to give the industry LOANS, then make them do the exact same thing that Chrysler did under Iacocca, and that was pay it ALL back. Help is one thing, a freebie is another.

Re: What is a "Foreclosure Victim"?
 

Exactly... My retirement portfolio does have some "real-estate" funds so I am not sure how much I will be impacted yet, but anything that I lose is my own fault for trusting a "real-estate" fund that I select with a radio button when managing my 401(k) online.

ARMs were supposed to be a tool for the "mortgage savvy" and not a way for people who could not afford houses to afford them. I know people that used ARM's for the same reason as you describe and they were prepared to move that mortgage over when they needed to do so.... I still thought it was a risk that I would not take myself, even though they knew what they were doing... but then again, I don't trust anyone...

Re: What is a "Foreclosure Victim"?
 

That is not what I am saying. My point is that not everyone who has an ARM bought over their heads. There are people out there who fell on hard times such as the job loss, illnesses, etc - just like folks who have gone through foreclosures who did NOT have an ARM. I just think it's broadbrushing everyone who has gone through foreclosure who had the ARM into one big group to make such a statement.

Re: What is a "Foreclosure Victim"?
 

Certainly whoever signs on the dotted line is responsible for whatever they sign. We all get that.

But we cant underestimate the power that marketing and slick sales techniques have on those who are not financially savvy. Same thing applies with college kids who get into credit card debt. These 19 year old kids with no income are excited when they're offered their first credit card, with a seemingly manageable $1500-2000 credit limit. But they quicky end up up to their neck in debt, and ruin their credit for years etc. Sure the kids are ultimately responsible, but what about the banks extending credit to those who have no income to repay the loan. Isnt that irresponsible lending? Or predatory lending?

Lets not let the banks off the hook here. Predatory lending is a big part of the reason we're in this mess. Borrowers need to be responsible when accepting any loans or credit. But lenders should lend responsibly too. There's a reason why every state has predatory lending laws on their books.

Re: What is a "Foreclosure Victim"?
 

Even if someone lost their job, they are not a "foreclosure victim"... they took a gamble that their employment income would remain the same and it did not. We all take that gamble every day, but you are not a "foreclosure victim" if you lose your job... you are just someone who took a gamble and lost.

Re: What is a "Foreclosure Victim"?
 

I understand that the unforseen happens, but that is why people need to change their spending habits! First and foremost, they need to start living within their means. I personally am against debt of any kind (with the exception of a single mortgage), but otherwise, if you can't afford it, don't buy it!

Secondly, the most important thing in ANY financial planning is called a contingency fund. It should be the goal of everyone to have 3 to 6 months of living expenses put aside in the case of calamity.

So yes, bad things happen, and its sad. But none of us are ignorant of that fact, so what is our excuse if we fail to plan? And why should the people who have scrimped and saved, and make numerous sacrifices, be forced to bail out those who chose to eat drink and be merry?

Re: What is a "Foreclosure Victim"?
 

I think you're right. There were a number of folks who, for them, this was a way to lessen the financial pressure until they got a better job etc. Bottom line though, it was still their decision. If you can't afford the house you're in, sell it and get one you can. Can't sell your house in a down market? Then you have to bite the bullet and get out of it what you can so it doesn't bury you! These are really simple principles. I know a man right now in our church who is about to get BURIED in credit card debt all because he wouldn't lower his asking price for his home. Now he is going to lose 3 times what he would have by lowering it to a sellable price. People takes risks and have to live by them.

I have done the same and lost before. My choice, my consequences. I don't want the Gov't to bail me out. I want God to grant me the wisdom the scriptures talk about so that I am not taken advantage of. If I don't have it myself, then, Lord, put someone in my path whom I can trust who will help me understand. :D

Re: What is a "Foreclosure Victim"?
 

I completely agree that banks are responsible as well, they should never have made the loans in the first place... I just object to the term "foreclosure victim". I didn't even want to touch the other issues regarding the lending institutions because I don't understand it enough to talk about. Rest assured that I believe they are a bunch of crooks that prey on people's inexperience... same thing with pawn shops, and those quick cash places, and rental centers. They all prey on poor people and take their money.

I did the whole credit card thing in my late teens as well, and have spent many years fixing the problem that I created for myself... I don't consider myself a victim, I consider that I made a mistake that I have to pay for myself.

Re: What is a "Foreclosure Victim"?
 

Exactly! We've come a long way from Charles Ingalls having a credit account at the general store to buy seeds for his crops.

Re: What is a "Foreclosure Victim"?
 

This is a topic near and dear to my heart right now. My soon-to-be-ex MIL, who is about to go into foreclosure, is insanely angry at the fact that some furniture that she gave me and my husband 5 YEARS ago, came to me in the divorce agreement. In fact, she thinks that I should now PAY her for this furniture, because she apparently charged it, and is stilling paying for it. (According to her, if you gave someone a gift, buy haven't fully payed for it, it still belongs to you :snapout )

The funny thing is, we never asked her for the furniture, and were completely unaware that she was charging it (I would never have accepted it, if I had known).

On my part, I just try not to be amused by the fact that she believes that not making her credit card payments is going to make them come and repossess the furniture :crazy

Re: What is a "Foreclosure Victim"?
 

sometimes people do not know what they are doing...

Re: What is a "Foreclosure Victim"?
 

These are my sentiments.

I agree that other people should not have to bail out the folks going through foreclosure. I am just stating my case that not everyone who is there bought over their heads as Brad kept saying in the beginning.

Re: What is a "Foreclosure Victim"?
 

Your point is well taken and certainly valid!! :D

Re: What is a "Foreclosure Victim"?
 

I'm sorry I broad-brushed... I posted that immediately after watching the presidential address from last night (I watched it this morning).

Re: What is a "Foreclosure Victim"?
 

In other words, quit yammering about it? :tease

Re: What is a "Foreclosure Victim"?
 

For what it's worth, I agree with 98% of what you said.....;)

Re: What is a "Foreclosure Victim"?
 

Is it alright if I am? (amused) :D :toofunny

Re: What is a "Foreclosure Victim"?
 

I had an ex-girlfriend who thought I would be responsible for my parent's debts when they die...

Re: What is a "Foreclosure Victim"?
 

:toofunny :toofunny

Re: What is a "Foreclosure Victim"?
 

:D

I had a mental picture of Mich's MIL yelling at her in a petulant voice, "Fine! I"ll just stop paying the bill, and they'll come take the furniture, and THEN what will you SIT ON????!!!!!!!!!! MOON CHAIRS, THAT'S WHAT!!!!!" Imaginary older woman with gray hair stomps out of the house, red-faced, while Michlow looks on with a bit of a smirk.

In unrelated news, every time I say "moon chair" I think of "moon pie."

Re: What is a "Foreclosure Victim"?
 

Of course not......yammer away! You paid your AFF dues, right? :D

Re: What is a "Foreclosure Victim"?
 

I think I'm late - you gonna foreclose my membership?

Re: What is a "Foreclosure Victim"?
 

Good point.

Also, I can't stand the word victim, but there were people out there willing to take the risk just so they could have a home of their own.

Do you blame the snake oil sales man or do you blame the person who bought the snake oil?

Re: What is a "Foreclosure Victim"?
 

:heeheehee

I think that she is a bit mentally unstable! As there have been threats of lawsuits, and mysterious statments that she has been gathering "evidence" on me for years. I think more than anything she is angry that Matt and I are still friends (AND he passes on to me everything she says), I think she was hoping that because we were splitting up, he would join her on the dark side. (the dark side being the place where people who don't like me dwell :D )

At any rate, our divorce hearing is on Oct. 31st, so only 36 more days until I can forget she exists.

(BTW, it's slightly ironic that we got married a week before Valentines day and are getting divorced on halloween...it's symbolic of the path our marriage took! :ursofunny )

Re: What is a "Foreclosure Victim"?
 

Sometimes people don't know what they are doing because they believe advertising hype without research or finding someone they trust to do the research.

I have been investing in real estate for a number of years and I have had some great success but also some horrific failures. Right now I have a triplex that I wish to God I had left alone, but it was a good deal at the time and rental rates were high.

I have it rented and it is cashflowing however I need to sell it and cannot do so without taking a $30-40k hit. I just don't have the time or energy to manage it and a management company would break me even...which I suppose wouldnt be bad.

I have to batton down the hatches and stick with it for a few more years and hopefully I can make that amount when I sell it.

Re: What is a "Foreclosure Victim"?
 

You're funny today. :D

Re: What is a "Foreclosure Victim"?
 

...man we have so many things to be thankful for.


:D

Re: What is a "Foreclosure Victim"?
 

A huge chunk of the blame on banks really belongs to congress.

I do realize that some of these banks did some really bad things, but a pretty big chunk of this problem happened with Congress required banks to lend a certain % to high risk borrowers in what they called "underserved communities".

Congress forced regulation of banks to drive loans to poor and minorities that couldnt really afford these loans. They did it by law and now we are reaping the whirlwind.

Now, anyone who took an ARM and took it in the shorts is no victem. But that doesnt change the fact that if we dont find some way to fix this, all the rest of us are going to be in trouble too.

Re: What is a "Foreclosure Victim"?
 

I don't know a lot about mortgages or real estate, but I know in the insurance business, the onus is on the agent or professionals to make SURE the client understands a policy. For instance, if they are uneducated or elderly, then the government places the responsibility on the person who DOES understand the policy to convey it to the insured--and you don't let them sign the policy UNTIL they understand certain aspects.

It is also required that you use language easily understood by the client, and not big words that only a lawyer could understand.

Anyway...I think that consumers DO need to be proactive and educate themselves, BUT mortgage companies (and other businesses) have deliberately misled consumers in many cases, through advertising, sales, high-pressure, and sometimes just outright lying and subterfuge.

If contracts are so poorly worded that only an attorney can translate them to a client, then the company needs to reword the contracts. It's a shame that ANYone would have to hire a lawyer to read a contract in order to do business--although it is obviously necessary in many cases.

That said: I do get tired of folks wanting the government (e.g., MY tax dollars) to bail them out of every little problem (or big problem) they encounter.

Re: What is a "Foreclosure Victim"?
 

Very good point.

The most IMPORTANT point.

Re: What is a "Foreclosure Victim"?
 

Just to be clear, I think the bailout being talked about isnt the right way to fix this.

the government shouldnt be doing this. The government ought to be getting itself out of the way of business.

drop Capitial gains tax to ZERO
cut corporate tax rate to 12%
change the way we force companies to valuate these assets so we get a real picture of what they are acutally worth and not a picture of what other people think they are worth.
repeal Sarbanes Oxley


you do those few things and all the money in the world will flow to the US banking system.