Banks are just plain stupid!

[marine2541]

My wife called the bank and tried to work out something to lower our mortgage payments. I'm retired and live of my state pension for 34 years in the Public Schools and social security. My wife is a real estate agent and that is as good as being unemployed in Michigan. Our mortgage is upside down. The payment takes 1/3 if the money I get monthly. However, because we are to date on both mortgage and a second mortgage payment, they won't do anything to negotiate our payment.

While listening to the radio the other day, a woman called in and pretty much described my situation to a financial expert. His advice was to quit paying the mortgage and put the money into escrow in order to get more leverage in negotiating with the bank. What the hell!?

A friend of mine, an actuary, who does our taxes and runs his own business in Florida and the UK is advising us to just quit paying the mortgage and bank the money for the next 9 months it takes to evict us from the property. Again, What the hell!?

Michigan is losing a family every 6 minutes because the Democratic Party trashed the state with increased spending and high taxes. The Feds and union absolutely ruined the auto industry and Michigan is becoming a 3rd world country! 3/4ths students in Detroit schools don't graduate high school and only .05% of graduates are capable of college level work. Home after home in some areas are in foreclosure. We struggle monthly to be honorable people while the Obama administration is offering all kinds of help to people who lied on mortgage applications and just refuse to make payments. So, what is to keep my wife and I from taking the advise given?

Why are banks so stupid? If they just worked with people, people in my position wouldn't just turn in the keys to their homes and walk away.

 

[marine2541]

My wife called the bank and tried to work out something to lower our mortgage payments. I'm retired and live of my state pension for 34 years in the Public Schools and social security. My wife is a real estate agent and that is as good as being unemployed in Michigan. Our mortgage is upside down. The payment takes 1/3 if the money I get monthly. However, because we are to date on both mortgage and a second mortgage payment, they won't do anything to negotiate our payment.

While listening to the radio the other day, a woman called in and pretty much described my situation to a financial expert. His advice was to quit paying the mortgage and put the money into escrow in order to get more leverage in negotiating with the bank. What the hell!?

A friend of mine, an actuary, who does our taxes and runs his own business in Florida and the UK is advising us to just quit paying the mortgage and bank the money for the next 9 months it takes to evict us from the property. Again, What the hell!?

Michigan is losing a family every 6 minutes because the Democratic Party trashed the state with increased spending and high taxes. The Feds and union absolutely ruined the auto industry and Michigan is becoming a 3rd world country! 3/4ths students in Detroit schools don't graduate high school and only .05% of graduates are capable of college level work. Home after home in some areas are in foreclosure. We struggle monthly to be honorable people while the Obama administration is offering all kinds of help to people who lied on mortgage applications and just refuse to make payments. So, what is to keep my wife and I from taking the advise given?

Why are banks so stupid? If they just worked with people, people in my position wouldn't just turn in the keys to their homes and walk away.

 

[1968hawkeye]

Have you considered doing a re-fi? My wife and I just re-fi'd our mortgage and lowered the interest rate almost about 190 basis points.

Oops, I just re-read your post and if you are under water (owe more than the market value of the house) you most likely will not be able to re-fi without bringing the difference in cash to the table.

I don't agree with the recommendation of stopping paying your mortgage.

Wish I could be of more help.

Hawkeye

 

[marine2541]

We aren't planning on doing anything like this now. I just have more compassion now for those who have because of their economic situation. It's easy to have contempt for someone if you don't walk in their financial shoes. This is just exactly how the Democratic Party and their policies have destroyed the inner city and families in the inner city. Now their tenticals are reaching into the suburbs via their misguided policies. Now our entire country is being subjected to a massive shot of socialism.

 

[ingmansinc]

A little food for thought. The mortgage crisis started the down turn of the stock market in approximately Nov. 2007. That crisis was created in large part by the greed of bankers and their failure to promote responsible borrowing and that began in approximately 2003.

The executives of these lending institutions aren't claiming responsibility so why should you, the average citizen, feel guilty about doing what you have to do to improve your situation. Think of yourself first, it is your future and you were not alone in arriving at the point you are at now.

Semper Fi

 

[Frizzman]

I am very sorry to read of your troubles. I am also retired from the state and get a modest pension. I would be tempted to just stay until near foreclosure and just walk away and start start over again someplace warm and sunny perhaps. That's easier said than done though.

Both political parties have been screwing us. They throw mud at each other in public and eat and drink at the same steakhouses in Washington and slap backs and make deals out of sight. They and the players that pay for them encourage us to blame one party or the other. Whoever you blame, they all still cary on business as usual.

When was the last time you heard of an insurance company going under? The banks are the same. They stick it to us with easy credit that gets you in such debt that it puts you into virtual slavery and then they feed you to the lions when you can't pay. I had a relative who had some retail debt and lost his job by no fault of his own. He and his wife contacted the banks and finance companies and tried to negotiate a way to pay it as they were able. They were stone walled and harrassed to the point of just declaring bankruptcy. They were offered credit almost immediately after that. The vultures always show up to pick the carcass.

Sorry, a bit of a rant. I hope it works out for you. When the hogs push it to the point of puting so many people out of their homes I hope the eventual reaction will be to get rid of the corrupt politicians and clean up the system. Good luck to you!

 

[feralmerril]

Hey! The boys at fox and rush tell me the loan companys, fannie may etc, were pressured by the democrat controlled congress that obama was part of at the time, to give loans to the indigent that couldnt realisticly afford them! Now with everone all the sudden being able to buy a house, that also drove prices up on the houses. Now other people bought those overpriced houses. Then when the prices dropped everybody was upside down. Now the thinking was hey if I owe $300,000 on a house worth only a $150,000 I am a fool for hanging on! AND I may be talking about some that are still working and can afford the payment. Are they going to keep a now $150,000 house with payments on $300,000? On top of that, they can live there close to a year or more and pay nothing if they decide to do that and their concense lets them!
This thing snowballs!

 

[diamonback68]

Sorry to hear about your circumstance.
"Our mortgage is upside down", that's where they got you. No bank is going to loan over 100% especially now when house prices continue to fall making matters continually worse. Hope you can work something out without going to foreclosure.

 

[RGAmos]

Be careful about willfully defaulting on your mortgage. Unless you are a protected minority, such a default will result in your credit rating tanking and your possibly not being able to get another mortgage in the future.

 

[badam0112]

Originally posted by ingmansinc:
A little food for thought. The mortgage crisis started the down turn of the stock market in approximately Nov. 2007. That crisis was created in large part by the greed of bankers and their failure to promote responsible borrowing and that began in approximately 2003.

The executives of these lending institutions aren't claiming responsibility so why should you, the average citizen, feel guilty about doing what you have to do to improve your situation. Think of yourself first, it is your future and you were not alone in arriving at the point you are at now.

Semper Fi

Actually the mortgage crisis started in the 1990's when congress decided everyone had a right to own a home and forced lenders to loosen the guidelines and make loans available to more people. Be careful what you wish for.

Here is a great place to get free advise on how to navigate these issues.

http://www.hopenow.com/

 

[RGAmos]

I believe it was the "Community Re-development Act". I can still remember Jesse Jackson appearing on TV with complaints that minorities were more likely to have mortgage applications rejected than were others. Jackson did not seem to understand/care that the rejections were based on lack of ability to pay. If you think this was a joke, you haven't seen anything yet

 

[coldmold]

First of all I am not a troll. And I dont want to stir up any trouble. I dont post much but I would throw out this question. Why did you retire with a mortgage hanging over your head.
I retired 4 years ago but my house was completly paid off and I had no large comitments for my money.

 

[The Big D]

marine2541, I understand your situation and am sympathetic. More on that below...

To those who blame the lenders, let me relate MY personal situation. I retired in 2005 after having contracted for a new home in my hometown where I had not lived in many years. I am very fortunate in my personal financial situation and sought an 80% mortgage with a mid-800 FICA, zero debt. Closing was to be spring, 2006, 6.25%, 30 years, fixed. About two weeks before closing the lender contacted me and said they could not proceed as there were not equivalent properties in my new town. (Bear in mind that my home was fairly high end albeit not extravagant and similar properties couldn't be found nearby.) They reneged on their loan commitment.

I was then in a position where I couldn't find a lender and was due to settle. FTR, there was no indication whatsoever that I couldn't make the payments then, now, or at any point in the future. After scrapping about for a bit I located a lender who would commit to the loan after equivalent properties in my community were located; but 6.825%. No viable options remained; I agreed and waited 'til three other homes closed, comps were then available, and closing occurred.

Here is the "problem." I KNEW what I could afford. I wasn't a moron who bought a million dollar property whilst making $60K and speculating I could flip it. I would like to refinance now but lenders are boning me b/c I make all my payments (auto pay, directly!), haven't missed a payment, have verifiable (and guaranteed) income, and am not one of the people who bought a "home" with no intent to live in it.

Like marine2541, the "good" homeowner is being penalized. I pray for the folks who bought the home they could afford and by no fault of tgheir own can no longer afford to pay for it. I will spit on the ignorant ne'er do wells who bought something to flip or who had no ability to pay for what they bought unless they could flip it, quickly.

YOU sign the contract; do not blame the lender. YOU know what you can afford (if you take home $3K you can't afford a $3K mortgage) so don't whine when you get your dumb butt evicted.

I am fortunate, indeed, so I don't need help but help is being given to irresponsible. stupid, arrogant, and ignorant people who simply do not deserve it while folks like marine2541 get screwed.

Rant off; with apologies for the long post.

Be safe.

 

[The Big D]

Originally posted by coldmold:
First of all I am not a troll. And I dont want to stir up any trouble. I dont post much but I would throw out this question. Why did you retire with a mortgage hanging over your head.
I retired 4 years ago but my house was completly paid off and I had no large comitments for my money.

What are you talking about? Don't retire unless your home is paid for? Why? I am anxiously awaiting plausible answer to this?

 

[feralmerril]

In 1969 I wanted to buy my 1st house. I was single, 28 years old with a good stable job at lockheed. I had already been on the job for close to 4 years. I tried to buy a VA repo that was about $16,000. I was turned down and asked why. Answer: I was single.
A few weeks another that was a LOT less house came up for $12,500. I applied for that one but noted on the application I was engaged to a woman with a couple kids. (I wasnt). It went right through. Also on that deal I went to buy homeowners insurance at sears. A couple weeks later I got a refuseal to insure. Asked why. Answer: It was against their policy to sell insurance to a single man! Things sure changed!
Come to think of it that worked to get my job too. The chief was reluctant to hire a single guy. I whipped out a old picture of a ex girlfriend and her little son that I hadnt taken out of the back of my wallet yet, and said chief, I just left my widowed girl friend back east, came out here to get a good job, send for her and get married! Well, it was half true.
I had a mortgage yet when I retired. But I had it all planned to pay it off with money from my 401k and move, wich I did. However, had I planned to stay in the house I dont belive I would have paid it off and I would have just made the payments and let the 401K grow untaxed. We all have reasons for what we do.

 

[Haku]

That is why I live in the Republic of Texas

 

[Hermann]

Regardless of the circumstances: Banks are there to make money from you and don´t expect them to help you.

Remember: "I´m from the government - I am here to help you!" LOL!!! - just exchange "government" with "bank" ...

 

[HOUSTON RICK]

Posted by the honorable Feril:

"Hey! The boys at fox and rush tell me the loan companys, fannie may etc, were pressured by the democrat controlled congress that obama was part of at the time, to give loans to the indigent that couldnt realisticly afford them! Now with everone all the sudden being able to buy a house, that also drove prices up on the houses."

Problem is that the Democrat controlled congress was pressured by the bankers, financiers and their lobbyists to "pressure" the bankers and financiers into making all that money with those irresponsible loans once the responsible, legal loans maxed out.

Marine, you know what the right thing to do is, but bankers are not stupid - they have managed to be capitalists during the boom and make big bucks in exchange for no risk or management skills then become communists when the bill is due so we taxpayers can pay for their lavish lives and the lavish lives of their decedents. Is refinancing at the lower rates an option for you?

 

[tallpaul]

I get a kick out of this...
your income and retirement were known yet you are having a hard time making the payments on your home and now want SOMEONE ELSE to bail you out?

Unless you need to sell the outside market does not matter. You entered into a second mortgage etc knowing retirement was coming and the funds you had secured. How is any of this the banks responsibility or any one elses to provide you an out that for an issue that is mostly on paper?

Unless of course you took the variable rate loans that I and a bunch of others were offered and refused because we all knew the day of higher rates would come. The greedy and selfish folk who took the bait and now are in trouble are not my doing nor should I pay for them with tax dollars etc. They saved for years and now ar whining while I and millions paid a bit more for a while but took the smart route.

I have very little pity for any of it! The folk all entered into these deals... suck it up you did it to yourself. Charity and help should only come after you have nothing else to loose.

 

[bk43]

Originally posted by The Big D:

Originally posted by coldmold:
First of all I am not a troll. And I dont want to stir up any trouble. I dont post much but I would throw out this question. Why did you retire with a mortgage hanging over your head.
I retired 4 years ago but my house was completly paid off and I had no large comitments for my money.

What are you talking about? Don't retire unless your home is paid for? Why? I am anxiously awaiting plausible answer to this?

Don't hold your breath as there is none. There is much to be said for owning your home free and clear but of course you forgo years of leveraged income, and tax deductions, to do so. I've always prefered the money myself but this guy apparently doesn't.

Bob