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BS: Friends are going to lose their home
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Subject: BS: Friends are going to lose their home From: TRUBRIT Date: 10 Dec 06 - 05:00 PM Not even sure if this is an appropriate topic but I feel if I don't say something I shall burst. Went to see some friends who are also clients today to give them an evalation on the worth of their home. They bought it three or so years ago so even though the market is softer now I was able to report about a $30K gain, which I thought would be good news. As I went over the numbers with them, they indicated to me that owed more than the bottom line number I had come up with for them to receive -- they had refinanced a year ago into an adjustable rate mortgage. I asked them if at least they had had a good experience with the lender -- the answer was no, the lender was hard to deal with and unhelpful. But this lender - evidently with a licensed appraiser in tow, appraised their home at at least 20% more than it would have been worth - even a year ago. How can this happen? These nice people, both of whom work full time, are under water on the home -- owing at least $30k more on it than they can hope to get out. We were talking bankruptcy, foreclosure - it was a horrible conversation. I don't understand why it should be that two people both working hard in decent jobs and not living an outrageous lifestyle, have to lose their home (of course, part of the issue was the cost of medicines). How long will we go on without a national health program that will at least prevent decent well meaning people losing their homes over medical costs. Enough said - thanks for listening. Be VERY wary of adjustable rate mortgages - therein can lurk significant trouble...... |
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Subject: RE: BS: Friends are going to lose their home From: Ebbie Date: 10 Dec 06 - 05:11 PM Sadly, it is up to owners to be informed. Most people are aware of the hazards of mortgage financing, so when it comes down to it, we, the people, are our own worst enemies. That said, I agree with you about national health care. Our current system is unconscionable. |
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Subject: RE: BS: Friends are going to lose their home From: GUEST,heric Date: 10 Dec 06 - 05:37 PM >>evidently with a licensed appraiser in tow, appraised their home at at least 20% more than it would have been worth << Very common and very dangerous. Illegal as well, but with rapid run-ups it has been virtually impossible in recent years to show that borrowers suffered any harm from it. Your state Attorney-General, however, has the ability and possibly the initiative to "punish" the offending lender and/or "independent" appraisers. We'll see more of this in coming months. |
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Subject: RE: BS: Friends are going to lose their home From: GUEST,pattyClink Date: 10 Dec 06 - 06:57 PM We have some local prosecutors who are actively going after a ring of people who had crooked appraisers as part of their operations. It might be worth a phone call to a consumer fraud unit in your state's attorney general's office to see if they have any interest in prosecuting this one. For all you know the exact same thing has been done to dozens of people systematically. And your friends certainly can show they have suffered harm if they are in foreclosure. |
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Subject: RE: BS: Friends are going to lose their home From: GUEST Date: 10 Dec 06 - 07:27 PM Most states now require some sort of "truth in housing" inspection before the sale of a home, for any buyer. They are sometimes licensed by the state. Same could be done with mortgages, and that practice would go by the wayside. But then, the rich real estate speculators wouldn't make a killing when the housing market goes south, making all those foreclosures going through the roof. |
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Subject: RE: BS: Friends are going to lose their home From: Richard Bridge Date: 11 Dec 06 - 03:29 AM Appraiser surely owes duty of care to appraisee and can be sued in negligence? Here in UK those "mis-sold" endowment policies to pay out their mortgages are getting paid substantial sums by those who did the selling and/or the endowment and/or mortgage companies who benefitted. Surely in the land of the contingency lawyer, some inventive lawyer can mount a class action lawsuit, prominently featuring the F-word - "fraud"? |
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Subject: RE: BS: Friends are going to lose their home From: Zany Mouse Date: 11 Dec 06 - 05:48 AM Are your friends in the UK? If so then they can get a prescription season ticket which would mean they could have as many drugs as they need for a set price per year. Also in the UK, there are many diseases which exclude payment e.g. diabetes. Good luck to them Rhiannon |
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Subject: RE: BS: Friends are going to lose their home From: Richard Bridge Date: 11 Dec 06 - 08:41 AM I think ZM if you read the IP you will see that the description of the matter is in specifically American terms - and TRUBRIT (confusingly) is American or at least resident there. |
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Subject: RE: BS: Friends are going to lose their home From: Rapparee Date: 11 Dec 06 - 08:55 AM It's going to get a LOT worse. There are those "interest only" mortgages coming due as well as the Adjustable Rates ones. Even though we have a conventional mortgage with a reputable company, we continually get ads to "Refinance With Us!" both electronically and by snail mail. Heck, I even get offers to refinance the library, and it's owned by the city! And yes, the US desperately needs a health safety net! Ronnie Raygun said we had one, but I think it's been dismantled. |
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Subject: RE: BS: Friends are going to lose their home From: gnomad Date: 11 Dec 06 - 10:45 AM Rapaire: You are dead right re the "interest only" mortgages. They were widely sold here [UK] when they first came out, and are still being promoted. For the financially-aware borrower with planning skill and good self-discipline they can be the right product, unfortunately many [possibly the majority?] of borrowers do not fit that desciption. I am sure that many borrowers are unaware that the onus is upon them to put in place the investment planning which will eventually be used to repay the loan. I am equally sure that many borrowers are betting on a continuing steep rise in house prices to rescue them from the consequences of over-extending their borrowing. I look towards the next 5-10 years with a strong presentiment that this will be the next mis-selling scandal to hit our financial services sector. Just glad that in the days when I did advise people in this field I steered as many as I could towards the most cautious products, and that I moved to other work some 15 years ago. |
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Subject: RE: BS: Friends are going to lose their home From: Becca72 Date: 11 Dec 06 - 10:53 AM I work for a real estate attorney and we're finding that many of the people who bought a house 2-3 years ago and did an 80-20, or piggyback, loan are now headed for foreclosure. It all comes down to the fact that people wanted it Right Now and didn't want to save up enough to put down a 20% deposit so they put down $1000 and took out the 2nd mortgage on top of the first, quite a few of which were both adjustable rate. Now they're paying the price for it. There are a lot of dishonest lenders out there who just want the commission, sadly. |
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Subject: RE: BS: Friends are going to lose their home From: GUEST Date: 11 Dec 06 - 01:29 PM Very sorry foryour friends..too bad, it must be very difficult to be faced with losing ones home. I also believe that all nations need a national helth plan. Here in Canada we have one and although we constantly complain about it, we are fortunate to have it. Perhaps Ameriocans could make National Helath a major election issue in 08. |
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Subject: RE: BS: Friends are going to lose their home From: Maryrrf Date: 11 Dec 06 - 03:11 PM This is really tragic. Again, it underscores the need for a National Health plan. Desperate people do all sorts of things to pay for medical expenses, including refinancing and risking their homes. What a shame! |
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Subject: RE: BS: Friends are going to lose their home From: SINSULL Date: 11 Dec 06 - 03:24 PM Sad state of affairs, Deborah. Just a thought - this couple could not be the only ones sucked into this situation by the lender and appraiser. A little research might produce a class action suit and some reparation. Why the hell didn't they call you before burying themselves in debt? Or did they simply have to have the money? SINS |
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Subject: RE: BS: Friends are going to lose their home From: Rapparee Date: 11 Dec 06 - 03:31 PM I'm facing the purchase of hearing aids in the next few weeks (after the first of the year!). This is going to set me back, most likely, about US $3,500. Fortunately, I can afford them. Unfortunately, others can't. I wonder how many have to die because they didn't hear the fire alarm, how many children have to fail because they can't hear the teacher, before we learn the "promote the general welfare" means what it says? |
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Subject: RE: BS: Friends are going to lose their home From: Zany Mouse Date: 11 Dec 06 - 03:49 PM Sinsull: I've been helping out some friends who are in the same position as Truebrit's. Sadly people who are really in the sh*t tend to bury their heads in the sand. I'm very close to these friends (the wife and I refer to each other as our adopted sisters) but I had no idea they were in debt until I got a tearful phone call from her 3 weeks ago asking me to go and see her as she had a summons for repossession. I THINK we have managed to save the day, although it is by no means certain. People are good at hiding things, even from themselves. Be kind Incidentally, when I got to her home she presented me with a crate full of unopened letters, going back over 2 years. This, again, is a sign they are not coping. Rhiannon |
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Subject: RE: BS: Friends are going to lose their home From: SINSULL Date: 11 Dec 06 - 05:38 PM Rhiannon, That wasn't meant as a criticism. Deborah is first-rate Real Estate agent here in Maine who keeps in regular touch with her clients old and new. I checked with her before I refinanced both on rates and values. She doesn't charge for this service and I know I can trust her judgment. As to having to have the money, I was referring to their medical bills. My father was unable to afford his prescriptions but had five children who contributed to a fund. One brother saw to it that Dad got his meds, hearing aid, glasses, and anything else he needed. When my brother had a medical emergency that nearly cost him his home we were able to see him through the crisis. Not everyone has the luxury of a family or friends to help out and when you have to have medications or treatments,you mortgage the house. With Deborah's help they might have had a better chance at a realistic evaluation of the property and a fair mortgage rate. They might have been able to get a reverse mortgage and have both the money and their house. Sorry if I sounded harsh. It was not my intent. Mary |
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Subject: RE: BS: Friends are going to lose their home From: TRUBRIT Date: 11 Dec 06 - 09:32 PM Reading through all of the above has been helpful. BTW,I am British but have lived in America for many years -- the 'TruBrit' is my 'handle' -- helps people remember who I am and helps me remember who I am and where I come from. As a sort of general response to many of the comments I agree with everyone who suggests it will be worse before it is better. Sinsull, I think the reason they didn't call me is they are / were too embarrassed .... I frequently get calls from clients asking me for this type of information which of course is easily and happily provided. Of course, we have Tom (husband - attorney - nice) on the case trying to help them make some tough decisions but it is TOO LATE. I do understand that consumers have a responsibility to watch out for themselves as Ebbie says, but have you sat in a mortgage closing recently? There is no time to read the material even if you WANTED to. Some rapacious lenders are out there who just don't seem to give a damn. Here's an example -- one of my client's husband passed away in November of last year. She was told by her lender that she 'had to refinance to get him off the morgtgage -- it's the law'. (Oh yeah, news to me......). So she refinanced into a mortgage that she held for 11 months until we listed and sold her home for her -- guess what - $2500 in prepayment penalty for early closeout. You never see these from reputable lenders -- as Becky 72 (hi!) says, there are endless 80/20 loans out there with people able to buy a house with virtual no money down. Then the second there is a crisis, or not even a crisis, but a challenge, there is just no room for error. Add to this no national health and I see a disaster waiting to happen. When my brother in law in England lost his job about three years ago (unlikely to get another due to age) my first thought was -oh my God - they will have no health insurance but my second thought was - oh yes they will - they are in England. I know from talking to family and friends in England, the most common comment I hear about the National Health is - oh Deborah, it isn't like it used to be - not like you remember. That may well be so, but the fact of the matter is a degree of health care is available for everyone (NOT just the wealthy) and you don't have to lose your home over a medical emergency. I think there are going to be some intersting times ahead in the real estate world.......I'll continue to do my job as honestly and ethically as I can working with lenders and appraisers of the same ilk, but it is scarey.... Sorry to be so longwinded -- this stuff is really upsetting to me and I see it around me happending every day......... |
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Subject: RE: BS: Friends are going to lose their home From: Rapparee Date: 11 Dec 06 - 10:19 PM My wife, who is an attorney as well as other things, INSISTED that we have ALL of the paperwork related to the house IN OUR HANDS FOR REVIEW at least 48 hours before closing. This is not unreasonable. Moreover, the paperwork should be written in such a way that it it both clear and legal -- they are not mutually exclusive. You can write "buyer" and "seller" instead of "party of the first part" and "party of the second part." In fact, my live-in attorney says that if you can't understand it with a maximum of two readings, don't sign it until you DO understand it -- ALL of it. I really think that there's a really bad stretch ahead for real estate.... And I can't say that I feel badly for those who built houses on speculation and with borrowed money! |
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Subject: RE: BS: Friends are going to lose their home From: katlaughing Date: 11 Dec 06 - 11:03 PM Good luck to your friends, TrueBrit. I, too, feel concern and care for them in such a horrible situation; but for a lucky change in ownership of the place my husband works, we would have been looking at over $100,000 in medical bills a year and a half ago. There are some first-time home buyers programs, in our case run by the state of Colorado, out there which finance a down payment without causing undue hardship. It's how we got our house here, five years ago. We also have a very reputable real estate person. She guided us through refinancing, in order to put down 20% on a second house, this past year, for our daughter and grandson to live in. It is an interest only loan because we know we will be selling it to our daughter this coming year. It has worked well for us, BUT only because we had sound advice based on years of experience and conservative appraisals. May your friends find some way to peace and comfort in their lives regardless of what happens. All the best, kat |
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Subject: RE: BS: Friends are going to lose their home From: TRUBRIT Date: 12 Dec 06 - 10:20 PM A brief update -- my husband (also an attorney) chatted with them today (informally - not acting for them) - and it appears they are going to try and go over the lender for bad lending practices -- at the very least to try and see the appraisal and have it reviewed by someone else. Rapaire - you are so right -- there is a bad stretch coming for real estate -- started about November 2005 and it's still not finished. The good news for everyone is there are decent and honest brokers, appraisers and lenders out there -- before you pick one, ask your friends who they used and if they were comfortable. There is no better reference. |
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Subject: RE: BS: Friends are going to lose their home From: Greg F. Date: 13 Dec 06 - 09:53 AM Everybody relax & keep voting Republican- everything will be fine. |
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Subject: RE: BS: Friends are going to lose their home From: TRUBRIT Date: 14 Dec 06 - 12:04 AM oh -- that's the answer!!. Well, obviously the whole thing is my fault -- as a non US citizen I have the right to pay thousands in taxes but not vote -- so obviously it is the lack of my vote either way that has caused the issue. Problem solved....will persuade my husband to cast his vote on the dark side (as I have none)and see if that solves the problem........ |
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Subject: RE: BS: Friends are going to lose their home From: Richard Bridge Date: 14 Dec 06 - 09:48 PM Funny, I thought the US was big on "no taxation without representation". With the obvious exception of TRUBRIT here, though, the idea of an honest estate agent tickles my sense of humour. What next, the relaxed cabbie, the civil rights policeman, the frank politician, the heterosexual boy-scout leader, the sober folk-singer, the intelligent boxer, well? |
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Subject: RE: BS: Friends are going to lose their home From: TRUBRIT Date: 14 Dec 06 - 11:08 PM RichArd - thank you kindly for saying -- excepting TruBrit here - as I really AM an honest realtor. My poor husband is a lawyer AND a realtor.....in his next life he plans to be a used car salesman to complete the cycle of horror!!!!! |
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Subject: RE: BS: Friends are going to lose their home From: SINSULL Date: 14 Dec 06 - 11:24 PM Richard - TB is honest to a fault. I too was shocked at the concept of an honest RE agent. Deborah tells all, warns all, and will lose a sale rather than pull something dishonest or see a client not happy in a home. She worked with me for a full year knowing that I was not ready to buy. Constant updates on the market, advice on interest rates, suggestions on properties to look at with no pressure. When I decided to buy, it took about three weeks to find the house I wanted. It was mine because Deborah had guided me throught the mortgage process and despite unemployment I was pre-qualified at a competitive rate. She and Tom advised me about problems which showed up in the inspection and the repairs were done in time for the closing with both seller and buyer happy. Amazing. Of course, I had to sign my name about three hundred times to finalize the closing. SIGH! I have recommended her without reservation to everyone I know looking to buy or sell. Come buy a house in Maine and see for yourself. |
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Subject: RE: BS: Friends are going to lose their home From: Richard Bridge Date: 15 Dec 06 - 06:49 AM I don't think I can afford a house in Maine - I'm a poor lawyer (chuckle) |
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Subject: RE: BS: Friends are going to lose their home From: TRUBRIT Date: 15 Dec 06 - 10:02 PM Sinsull, thank you for this lovely vote of confidence..... you just made my day......! |
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Subject: RE: BS: Friends are going to lose their home From: katlaughing Date: 15 Dec 06 - 10:26 PM I'd say the same about our real estate agent. I really don't like it when people generalise. |
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Subject: RE: BS: Friends are going to lose their home From: Grab Date: 16 Dec 06 - 04:47 PM I have to say that our estate agents did a sterling job selling our place - very impressed. However, on the other side of the fence, I also know that they're a pushy bunch of sods who will do all they can to sell a house for the highest possible amount. Great for me as a seller, less good as a buyer. But you can't have it both ways. Choice of mortgage is always a gamble. Adjustable is always below fixed-rate when the mortgage starts, so you're betting on it not changing or going down. Sometimes you win bets and sometimes you lose them - they decided to bet and lost. That's all there is to it. Sorry to sound callous, but I'm afraid I really can't see how it's anyone else's fault. Presumably there was a ton of spare money left over from the revaluation, and they spent it all? Then their only solution is to save until they've covered the cash they spent. They don't have to change lenders now anyway - they can leave that until they've got the money together. And you say "not living an outrageous lifestyle", but they've managed to burn through $60k in a year?! Sure, some of that's medical bills, but even so, that's a fair bit of spending! I don't mean that there's anything wrong with them, but everything they did was their choice. Sometimes you make a bad choice - shit happens. But unless you've made that bad choice at someone else's recommendation, it ain't your fault. If they'd banked the $60k and not touched it then they wouldn't have a problem, but they chose to spend it because they had an immediate problem that was more urgent. Their choice. Graham. PS. Re the medical thing, my wife just had to go private for gynae problems to avoid being in constant pain for 3 months. Expensive stuff which has eaten most of our savings for holidays next year, but that was the choice. |
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Subject: RE: BS: Friends are going to lose their home From: GUEST,obie Date: 16 Dec 06 - 05:23 PM "Some will rob you with a six gun; some with a fountain pen." (Woody Guthrie) |
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Subject: RE: BS: Friends are going to lose their home From: TRUBRIT Date: 16 Dec 06 - 11:37 PM Interesting, Grab, as when I talked to them -- she, at least, acknowledged that the situation was their fault. I do agree with you around choices -- I just think it is hard when the message society sends out everywhere you turn is that some choices which most of us would consider high risk, are touted as ok.....and the suggestion is that you REALLY can't be a whole human being without a cell phone (substitute IPod, substitute Lap top etc etc etc etc) |
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Subject: RE: BS: Friends are going to lose their home From: jacqui.c Date: 17 Dec 06 - 09:35 AM Grab - unless you are lucky enough to have a good medical insurance over here medical bills for a serious illness can quite easily wipe out $60,000. Unfortunately the cost of good insurance is almost prohibitive - we are covered under a federal scheme, because Kendall was a federal employee, but that takes about one eighth of our monthly income to keep up and that is very good value. If you don't have that advantage then, quite often, it is a case of getting the basic cover or none at all. I would agree with Deborah - the British system is not the best but it does provide a safety net for everyone. Over here that is not the case. |
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Subject: RE: BS: Friends are going to lose their home From: TRUBRIT Date: 17 Dec 06 - 09:36 PM Amen Jacquie - Amen. |
