I've heard that mortgage companies are trying to get new laws passed regarding 30 yr fixed mortgages. I've heard that they are trying to make it so that if any new company buys your mortgage the new company will be able to change your rate even though you signed papers for a fixed rate over the life of the loan. I currently carry an extremely low conventional mortgage with the rate of 5.25% fixed for 30yrs and I recieved this mortgage through a very ligitament bank. My contract states that no matter who purchase my mortgage they cannot change my rate throught the life of the loan no matter what. Obviously most banks don't hold onto the loans and my loan was sold to Countrywide about 4 months or so after the closing and I have been paying them for 5 years. But I've heard that they are trying to make it so they can change rates of fixed loans with new legislation. Is this true? If so can anyone point me to some info regarding it?
2007-08-10 06:54:30 · 13 answers · asked by W 3 in Business & Finance ➔ Renting & Real Estate
No truth at all. I've heard that rumor on and off since the 1960s.
2007-08-10 07:28:17 · answer #1 · answered by Bostonian In MO 7 · 2⤊ 0⤋
If they signed a good-faith contract with you, you've got them on breach-of-contract grounds if they try that crap. Your mortgage is safe, because it's grandfathered in. Banks do not have the balls to try to rachet up existing loan rates.
I think your rumor is just that. The bank assesses its fees, charges its interest, and sells the loan to someone else, who must abide by the letter of your contract with the original bank.
Can you imagine how many empty houses there would be, and how many irate former homeowners would be flooding the capital, if Congress actually approved something that outrageous?
If you want a recipe for pandemonium, all you have to do is pull the rug of security out from under a few million people. That'll do it.
Where'd you hear something like that, anyway? Hopefully a comedy web site. The mortgage business would be committing suicide to try to scam people at this period in history.
2007-08-10 07:01:40 · answer #2 · answered by wood_vulture 4 · 0⤊ 1⤋
Long ago in a place not far from here there existed a thing called a 'message board'. And it was there that many a troll would waste the day in an unproductive haze. Answers is but a pale reflection of what once was. Not that I'm bitter or anything...
2016-05-19 00:14:14 · answer #3 · answered by ? 3 · 0⤊ 0⤋
Ain't gonna happen. Not ever. Not a chance in hell. There's zero chance that this could happen. If all banks had to do to raise rates on their portfolios was to shuffle loans between themselves, the loans could never be called "fixed-rate" anyway, since they'd just bounce them around every couple months to maximize their yields.
I don't know where you heard this, but ignore it.
Fact is, though, that the U.S. is unique in offering 30+ year fixed-rate loans. Our pension & insurance industry needs those types of loans to buy, to create the stable income streams their obligations require.
And they couldn't invalidate any existing contracts anyway.
2007-08-10 09:10:51 · answer #4 · answered by Yanswersmonitorsarenazis 5 · 2⤊ 0⤋
The mortgage companies might want to try and do that, but I think that would get shot down totally by Congress. A "fixed" rate is just that, fixed. The rate can't be changed.
2007-08-10 07:03:26 · answer #5 · answered by Anonymous · 0⤊ 1⤋
Fixed rate loans are fixed. Stop listening to rumors.
2007-08-10 09:42:02 · answer #6 · answered by Anonymous · 0⤊ 0⤋
I wouldn't be surprised if they tried adding this clause onto newly created mortgages but I don't think they would dare do this to existing mortgages. So many millions of people would be affected that it would be a disastrous move politically. Dont worry about this, for an existing mortgage.
2007-08-10 07:43:31 · answer #7 · answered by Slumlord 7 · 0⤊ 2⤋
Relax!
Contract law says no one can go back and change the conditions of the contract UNLESS SPECIFICALLY STATED IN THE CONTRACT.
You could sue them for breach of contract and win big time.
2007-08-10 12:08:17 · answer #8 · answered by Terry S 5 · 0⤊ 0⤋
I haven't heard of such a thing and I seriously doubt it would ever pass, because if it did, no one would sign for such a mortgage again.
Your best bet is to contact your congressman's office to ask if such a proposal has been introduced.
2007-08-10 07:42:45 · answer #9 · answered by AnOrdinaryGuy 5 · 0⤊ 1⤋
Wow, thankyou! Just what I was looking for. I looked for the answers on the internet but I couldn't find them.
2016-08-24 11:40:49 · answer #10 · answered by Anonymous · 0⤊ 0⤋