This “Reverse Reward” pogram seems to be part of the government’s plan to remove all incentives in this country. We take care of all of societie’s misfits (with speciual programs), but ignore those who play by the rules. Take the mortgage defaults-those who never should have had a mortgage are now going to be rescued-by the people who behaved responsibly. The corporate executives who bankrupted their firms walk off with huge bonuses.
Something is not right.
Maybe not a pit response, but I don’t understand why you don’t qualify.
As I understand it, there are two programs. Mortgage refinances, and mortage modifications.
The requirements for the modifications are here:
The program is to modify mortages (both by reducing interest rates and by government subsidy) to reduce monthly payments to 31% of your gross income.
Y’know the sad thing?
I’m 26 and engaged. We’re in metro Detroit. Y’know, Michigan, probably the shittiest state (and the shittest metro area) right now. People are still asking us if we’re gonna buy a house right away.
Telling them that:
- We don’t even know if we’ll stay in this state much longer, since it’s dying
- We’re both young and have no kids, so leaving the state is much easier
- A house might be a “steal” right now, but if we had to leave? We couldn’t sell the house if our lives depended on it. Even foreclosures aren’t be snapped up now.
- We’re still planning and saving up* for a wedding. So no, we don’t have 20% for anything other than a foreclosure that people have wrecked and pissed in.
- And you’re still saying that we “just need 5% down!”? WHAT WORLD ARE YOU LIVING IN?
And dammit, there’s no shame in renting, anyway. For fuck’s sake!
- Not a lot, since I am NOT paying a lot of money for one stupid day.
Same boat. Bought a house four years ago with nearly perfect credit and a 30 year fixed rate loan. I lost my job last April, and struggled to pay the mortgage. I got another job in November … halfway across the country. I can’t sell my old house, and there’s no interested renters either. It’s in suburban Cleveland, where there was never a boom, but there was an absolute bust; the housing market is dead. The market for my profession is nonexistent there, too. Did I mention there’s several foreclosures on my block, too, which the banks are dumping at half the price of my house? Sure, I spent thousands to upgrade my house before I left, trying to make it more appealing to buyers, but that was for squat.
A couple more months of this, and I’m going to say “screw my credit; bank, here’s the keys.” I can’t afford to pay both the mortage (and utilities, insurance and so on) on an unoccupied house along with rent for an apartment in Austin.
I fought with the mortgage companies. I wanted a fixed rate and I got it, but the people at the mortgage originating company would keep sending me contracts that were different than verbally agreed upon. It was a long battle. We emailed back and forth for weeks and weeks. They would send me a variable contract and tell me it was the same thing because it reset in 5 years and had limits to how rapidly it changed. It was clear to me that there was a bonus in them selling a variable rate. They fought me and lied and then claimed misunderstanding when I got pissed. Then I read every damn word in the contract before I signed. It was an adversarial relationship. Their interests did not match mine.
Salesmen are good at their business. They know how to sell and I can see how people got convinced or just wore down. My wife would have lost the fight. She believes salesmen. My default position is they are liars and looking out for themselves. You are just another customer.
God forbid you should pick up the phone and call a different lender.
I worked with 4 simultaneously.I ended up with the one that actually could learn to listen after a while. It was a battle from all of them.
It really pisses me off that renting is somehow seen as shameful or not as good. If renting is the right thing, people should do it, and not be pressured into buying a house they don’t want or need! If you can afford to buy a house - great, but the stories like the OPs make me super duper glad I never gave in to the pressure. (Well, I never even came close. Don’t want all of that responsibility.)
Thank you! Both owning and renting have their own positives and negatives. You’re not a failure because you don’t own a damn house.
Did they all try to give you papers for adjustible after you told them you wanted fixed? Or was that just the worst one?
Great. You’re not an idiot. I fail to see how that has any relevance on my statement that those who didn’t read the contract or took an offer they couldn’t afford are culpable.
All of them.
Fill in insulting name here ( ). Now pay some attention. The mortgage originators were salesmen who had only their best interests at heart. They were peddling mortgages that made them the most money. They had no interest in the buyer . I did not take the offers. It took me a long time to get them to finally do the contract I wanted ,instead of the one that got them the best bonus. They would tell me over the phone that they knew what I wanted and would email a deal. They would over and over say one thing and do another. I did not sign a bad one. I forced them to give me the one they promised.
The people who took adjustable rate mortgages could see a long history of house cost steadily rising. as a matter of fact for many ,they rose over their entire lives. They were convinced by overwhelming evidence that the house would go up in value and be easy to sell. That was our history for a long .long time. Millions of people got adjustables and made out very well. Millions bought houses that were at the upper limit of what they could afford and made out well. That was the history of American home buyers. They were not stupid. You expect a lowly home owner with zero financial background to know better. But, the MBAs running the financial companies did not know. The politicians and economists did not know. But the plumber buying a house ,should have known.
The crisis is solely the fault of the bankers. Yes, homeowners should fully understand the contract and their responsibilities, but the banks and investment companies built the house of cards that lead to this meltdown. If they had acted more responsibly, the fallout would be limited to a small section of the housing market.
Instead, they were making money hand-over-fist selling these ARM and interest-only loans to people who had no business at all getting these types of loans. This caused everyone to buy a house and home values to skyrocket. The banks then resold these loans as investments which were then leveraged to get other loans. If the banks had been doing proper risk management, the loans would not have been made in the first place, and those which had been made would have been handled properly for losses.
I agree that many homeowners bought houses that they knew they could not afford and they should not have done this. However, that is not what caused the meltdown. The bankers built a huge mortgage Ponzi scheme and it ran out of new homeowners. That’s why we’re in this mess.
I remember all kinds of weird shit lenders threw out when I was purchasing a home. There was the one that encouraged me to flat-out lie, the sales people who all spouted the same line about “buy the most home you can afford because you’ll only make more money later”, the ones who wanted to lend you more than 100% of the loan, just because. My favorite was similar to gonzomax’s experience - trying to get a fixed-rate conventional loan and having people thrusting everything but that at us. Eventually I complained to the VP of the bank I wanted to work with and he called back and apologized, telling me that part of the problem was that the youngster who was working on the loan literally did not know how to write a fixed-rate conventional loan with a down payment. The newbies had all been taught to write ARM and sub-prime loans and told only to push these.
It wasn’t until we said screw it, cancel the deal that we actually got what we wanted. Of course, now I wish we had said screw it because we are in a house we can’t sell (like everyone else) and my husband has been out of work for several months. Luckily it looks like he’s got a job lined up - two states away.
Once we can sell, I may go the route of renting again. I’m from California where there was never any stigma attached to renting, so it’s no big deal to me. We only bought in the first place because it is easier to have pet when you own than try to find a decent rental that will let you have them.
Best of luck to the OP.
Wow. For what it may be worth, that wasn’t my experience at all.
But anyway, it seems to me that a lot of these banks went hog wild lending money to people who probably shouldn’t have been borrowing on an ARM or even on a fixed rate for that matter.
I think that there are a lot of people in America who tend to behave quite irresonsibly. For various reasons, most of those people are probably better off renting than buying. Further, treating those people as if they are responsible is unlikely to make them change their behavior, IMO. Sometimes when I make arguments along these lines, I am branded as an elitist or even a racist, but there it is.
Sorry to hear of your dilemma, Perdita…that is some pretty cruel timing.
Do your best with what you have; it won’t go unnoticed. On every bill, pay something nominal like $25-$50 just to let each collector know that you’re not walking away from the debt. Some collectors will understand, and others won’t, but at least you know that you are doing the best you can given the circumstances. Creditors will go after the biggest deadbeats first, so you shouldn’t be one of them if you are making valid attempts to pay off you bills.
Good luck.
And many of those are bankers.
Maybe you should have considered a 5th, 6th, 7th and 8th mortgagor. There are hundreds of mortgagors out there. If they don’t listen to what you specifically asked for, hang up on them and call the next one. I myself have never encountered such blatant attempts that you have encountered, but I’m not arguing with you about that, but what I do want to comment on is that you should have kept calling other mortgagors until they actually listened and understood you THE FIRST TIME.
If they are not honest with you on the initial call, what makes you think they’re gonna be honest with you on subsequent calls?
I think most people are hard to move to take a risk on something as big as a mortgage. It was necessary for the companies to paint very rosy pictures. They talked people to death trying to sell them. They promised tons assuring people there was practically no risk. A truly wise person would only buy a house with cash. The rest of them are tossed into a jumble of oversell. lies and confidence men. 10,000 foreclosures a day tells you how well they did. It also tells you that the consumers are paying dearly for it. Families are in the streets. Kids are homeless. Makes some you feel good that they are getting payback. I get no solace from that.