Why don't people take responsibility for their Mortgages?

Question

I keep hearing about how it is the lenders fault that people are in over their heads in mortgages. WRONG....People know exactly what they are doing at the time they sign up for their mortgages. Truth in lending makes sure of this. Everyone that did an arm loan knew that their loans were going to be bumped in 3 / 5 / or 7 years. They knew they had this amount of time to get a conventional loan. Why is this the lenders fault. Now, people are trying to sue these lenders rather than agreeing to their contracts. If you are one of these people, sorry for what is happening to you, but are things that go wrong in your lives ever going to be YOUR fault?

Answer 1

I agree and would submit that your spot on in many cases. There are however many that take a unscrupulous loan officers advice and get suckered into a bad loan product. As required by law the terms and features are disclosed but often the loan officer doesnt take the time or have the financial planning knowledge to spell out potential pitfalls to what they are selling. Years ago, for example, countrywide had their community homebuyer firstime homebuyer loan. To qualify a borrower had to attend a class. Why arent lenders required to certify that their borrowers of hybrid loans made to educate borrowers the same way. I agree that many are using fixed to adjustable loans to buy time. What they do with that time is the heart of your statement. Many people are undisciplined and waste the 2, 3, 5, or 7 years and then cry wolf. Rather than repair their credit or change their spending habits they only rack up more debt and become worse off than before they took out their loan. To them I say its their own fault and nobody but them made the bed they now must sleep in. Some lose their job or have some other calamity strike their lives and to them I wish the best of luck to. I have also witnessed more first payment defaults in the last year than the 20 years previous combined. Why would someone take 75K worth of equity on a refinance and then default on the first payment. Those types should be banned from ever owning a house again. People arent being taught to be as responsible these days and its becomming an "I'm entitled" country here. Currently there is 200 billion worth of defaulted real estate in this country. What GW is asking to waste in Iraq would save every house in default nationwide. When a person graduates high school they are deemed educated and ready to enter the world. Why cant schools teach seniors as a requirement, modern financial skills and credit.

Answer 2

Truth in lending?? Do you think that the housing market is honest?

http://www.breakingbubble.com/

Do not think so. Do you really think that all these defaults are done by dishonest people or just stupid people if that was the case it is your fault for lending the money.

You think these defaults are what the lenders need to worry about if i was some loan officer that pulled the wool over some guys eyes what you need to be worried about is some guy at the end of his rope.

Force some guy in the a corner have him struggle a few years jack his mortgage up stress out his marriage, the wife leaves she take the kids now the DA want half his check as the banks take his home, this just might affect his work performance so now he is fired. He just might pop open a beer think about what started this mess and realizes that he is total free since everything has been taken from him that he has worked for.

I sure hope know one like that walks in to your office as you think i got another one and shoots you right in the face, what does he have to lose??

I wish you ten fold of every thing you deserve my your concise decide if that is a curse or blessing.

Answer 3

I don't think you are being fair. Yes, adjustable rates are subject to change. I went for a fixed rate mortgage and I am glad because there are no surprises. I do, however, have a home equity line with an adjustable rate, and that rate went up 2 percentage points over the course of 3 months. That did not match the market rate, the market did not go up 2 points in 3 months. Lenders take advantage of borrowers by first giving them artificially low rates to qualify them when maybe they shouldn't be qualifying for the loans. Then, the rates go up so quickly with no warning that a borrower can be facing forclosure because suddently their mortgage went up $500 or $700 a month.

Answer 4

I totally agree with you. Sometimes people don't even get an ARM loan, they get a conventional loan that is way out of their budget. On the other hand sometimes unforeseen things happen, someone gets laid off at a job, a medical emergency comes up, major repairs on the house. There are people that say that there is a percentage of people out there that live paycheck to paycheck, this is even people who make $40 to 50k a year. They have so much debt each month to pay besides the house payment that they end up losing the house.

Answer 5

Before you get high and mighty, realize that the economy makes decisions that homeowners have no control over. For instance, the layoffs in the auto industry and banks that merge--leaving people unemployed.

People do want to eat everyday and sleep indoors. Sometimes they can't immediately re-finance, for whatever reason. So, go on back into your tent, contemplate your navel, and be glad there's no hole in your 'ceiling'.

Answer 6

I totally agree with you 100% on that.