This is a very sad tale indeed.An aunt and her husband lives on the West Coast of Florida in a house valued at about $146,000 or less (they bought it for about $40,000).
In February ‘05 she got an interest only adjustable rate mortgage prepared by American Lending Corp. from MERS (Mortgage Electronic Registration System) for $140,000. Lender is Greenpoint Mortgage Funding, Inc. of Novato, Ca. The loan's interest rate goes up to 7.850% in January 2008. The interest will never be greater than 14% and never less than 7.850%. She also signed a waiver of escrow account.
My aunt was also given a balloon mortgage prepared by the same American Lending doing business as U.S. Guarantee Mortgage Corp. This balloon is in the amount of $35,000. So she has 2 mortgages for probably more than the house is worth and she can't afford the payments.
HERE IS THE BAD PART:
She is 85 years old and lives on a pension of $25,000 a year and gets a few thousand from social security. she has no savings. She also has a car payment of $457 a month (looks like the car guy saw her coming).
How could someone write such risky mortgages to an 85 year old woman without an income? She isn't the sharpest tack. They should have sent her home and told her to write a tight budget.
She is now pretty much destitute and will probably lose her home and car in short order as she asked me for a $25,000 loan (which is not going to happen because I am blogging too much). She wouldn’t tell me what was going on but I found all of this information on line much to her dismay.
How many more retirees in Florida were exploited like this poor X kindergarten teacher?
8 comments:
If she goes bankrupt, her teacher pension is at least safe -- according to Florida bankruptcy law.
SHE NEEDS A LEGAL SERVICES ATTORNEY TO HELP HER. PROBABLY NEEDS TO CONTACT THE FL STATE SENIOR ADVOCATE AND COMPLAIN TO MAYBE THE ATTORNEY GENERAL'S OFFICE... THEY MAY HAVE VIOLATED SOME LAWS.
THERE ARE PUBLIC INTEREST GROUPS THAT GO AFTER SITUATIONS LIKE THAT.
ALLIANCE FOR AGING HAS SOCIAL WORKERS TO WORK WITH THE ELDERLY AND ACORN GOES AFTER THE LENDER. (HERE IN MIAMI)
WOULD ALSO CHECK WITH THE FLORIDA DEPT OF FINANCIAL SERVICES BECAUSE THEY HAVE FOLKS THAT LOOK AT PREDATORY LENDING.
Check out what the Center for Responsible Lending says
____________________
Be Wary of Subprime Lenders' Claims
As the subprime mortgage market continues its meltdown and hundreds of thousands of families are losing their homes to foreclosure, the subprime lenders who made these loans say everything will be fine. Be skeptical.
Subprime mortgage lenders have launched a campaign to downplay home losses caused by dangerous subprime loans and discourage stronger consumer protections. In a statement issued yesterday, subprime lenders promoted principles that would allow business to continue as usual. This proposal—a clear attempt to avoid both strong legislation and sensible regulation—includes problems such as these:
Loopholes that would allow lenders to continue providing the same dangerous loan products that have caused the subprime crisis;
Policies that would obliterate state laws that protect homeowners; and
Over-reliance on disclosures in an industry that already overwhelms consumers with paper.
Under this proposal, homeowners now struggling with abusive subprime loans would continue getting refinanced into equally bad loans, and consumers who receive subprime mortgages in the future would be subject to the same abusive practices and dangerous products. The lenders rightfully suggest that existing borrowers who are unable to refinance into new affordable loans should receive loan modifications. This is a much better solution than the lenders' other proposal, which would allow families to be flipped from one "exploding" adjustable-rate mortgage to another, leading almost inevitably to foreclosure.
Corrections on MBA Speech
The head of the Mortgage Bankers Association, John Robbins, made a public statement yesterday in which he downplayed the home losses suffered by borrowers in the subprime market, and, unfortunately, incorrectly characterized CRL's research.
First, Mr. Robbins cites our December 2006 research ["Losing Ground"], which shows that 2.2 million families who received subprime loans between 1998 and the third quarter of 2006 either have lost or will lose their homes to foreclosure. Mr. Robbins said that the research counted subprime loans that entered foreclosure but then cured—i.e., did not end in foreclosure. In fact, we only counted foreclosures that ended up with families actually losing their homes. If we had also counted loans that managed to escape final foreclosure—still a traumatic event for the families involved—the number would have been significantly higher.
Second, Mr. Robbins's speech interpreted CRL's foreclosure research to suggest that the worst is over for subprime foreclosures. In fact, between 1998 and 2005, our research found nearly half a million completed foreclosures in the subprime market, but after 2005, we project 1.7 million more subprime loans will lead to the borrowers losing their homes to foreclosure. Lehman Brothers, for example, has projected even higher losses, anticipating that 30% of loans originated in 2006 will be lost through foreclosure.
Third, Mr. Robbins' comments also seek to perpetuate the myth that subprime lending has been a boon to homeownership. In fact, from 1998 through 2006, less than 10% of subprime borrowers used subprime loans to purchase their first home, thereby increasing the national homeownership rate, while 15% to 20% of all subprime borrowers will end up losing their home from subprime loans made during that period.
It's clear that we are seeing the beginning of a campaign by subprime lenders to ensure they can continue making dangerous loans. When you see comments indicating that the current epidemic of subprime foreclosures really isn't so bad, be sure to read between the lines.
Where is the money (total $175K) she took out on the 2 mortgages? I doubt very much that she will lose her home. She can always put back the money she took out 1 1/2 years ago in 2005 and she is back to square one, the same financial position where she was in 2005. oh, wait a minute, i almost forget that your aunt wants to keep the $175K and now cries foul that at 85 years old, she couldn't afford house payment anymore that she has a social security of $25K a year and car payment of $457 a month. I have no sympathy for her. Just pay back the money she took and her add-on problem from 2005 to you write this article is solved, again, she is back to where she was before.
Eye On Miami
Genius of Despair said...
I don't know where the money went but she doesn't have any...maybe when you live $10,000 beyond your means a year, that money can go out the door -- like a lot of other people, she is going to have to go bankrupt. She cannot afford the mortgage payments and there is no chance that she can ever pay off the balloon.
Sounds to me that this old woman is a con artist herself, she deserves whatever comes to her.
She is too dumb to be a con artist. Trust me, she doesn't know what is going on -- at all. I said originally: She isn't the sharpest tack and that was being generous to her.
Hi,
The information provided is great.
The mortgage lender that funds your loan is called the originator. A loan originator may be a bank, credit union, or other type of financial institution. On the date of funding, the money flows out of the originator's hands and into yours. You then turn that money over to the seller of the home.
LiveMortgageFree
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