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can someone explain why people are complaining about banks foreclosing?

J

jingramm

Senior member
You borrow the money from the bank
You can't pay anymore because you didn't think ahead/plan properly
Bank forecloses on delinquent accounts because it's a business

What's the issue?
 
The bottom line is people are stupid. They make bad decisions then blame everyone but themselves when the predictable outcome is reached. Ask Dave. If people weren't so greedy they would buy a modest house that they know they could afford in almost any situation, but that is not what happens in reality. If you are married and both working you should only buy a house that you can keep with only one of those incomes.
 
<---P&N

I'll bite. How about deceptive lending practices? Or loans with extensive fine print only a high-end lawyer/banker/astrobiologist can decipher? What about your loan getting sold to yet a new bank/creditor every time you turn around? Its damn inconvenient to have to send your mortgage check to a different place each month. What about robo-signing to foreclose a home without all the paperwork/due process that homeowners are entitled to? The list goes on. It isn't as simple as "you owe X and didn't pay X", especially if you got an adjustable rate one. Mortgages shouldn't be complex instruments. The math works out pretty easily on a fixed-rate mortgage. The terms don't need to be buried in fine print.
 
MovingTarget said:
<---P&N

I'll bite. How about deceptive lending practices? Or loans with extensive fine print only a high-end lawyer/banker/astrobiologist can decipher? What about your loan getting sold to yet a new bank/creditor every time you turn around? Its damn inconvenient to have to send your mortgage check to a different place each month. What about robo-signing to foreclose a home without all the paperwork/due process that homeowners are entitled to? The list goes on. It isn't as simple as "you owe X and didn't pay X", especially if you got an adjustable rate one. Mortgages shouldn't be complex instruments. The math works out pretty easily on a fixed-rate mortgage. The terms don't need to be buried in fine print.
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It is YOUR responsibility to read what you sign. There are tons of laws on disclosure that when buying a house it must be explained to you in very clear terms. If after all that, you still agreed to dumb ass terms, well that's what life calls "the penalty for being stupid".

And LOL at "inconvenient" to pay your bills. It is as simple as you owe X and didn't pay, otherwise all the hoops needed to be jumped through to foreclose, all the notices, all the legal certified deliveries notifying you of such, wouldn't have been jumped through.

But please do describe this fine print you're talking about. Have you ever bought a home? There are tons of things you need to sign and understand. Remember that penalty for being stupid thing I talked about? Yeah, the biggest one is not reading what you sign, especially when there is a lawyer right there who can answer your questions and explain everything as a neutral arbiter.
 
Ronstang said:
The bottom line is people are stupid. They make bad decisions then blame everyone but themselves when the predictable outcome is reached. Ask Dave. If people weren't so greedy they would buy a modest house that they know they could afford in almost any situation, but that is not what happens in reality. If you are married and both working you should only buy a house that you can keep with only one of those incomes.
Click to expand...

Mostly this. I can sympathize with the people that are facing foreclosure because of some unforeseen financial disaster (sudden death or disabling injury of a primary breadwinner, unexpected medical expenses, etc.), but way too many people were simply greedy and got burned, and are lashing out irrationally.
 
How about banks that try to foreclose on houses they don't even own, i.e., the mortgage was paid off years ago?
 
because it's the bank's fault that i borrowed 400k on my 30k a year salary expecting the price of my home to shoot up 100% in the next 5 years
 
With how slowly the banks move, a lot of people get to live well over a year in the home without paying a mortgage. Sounds like a pretty sweet deal to me.
 
theevilsharpie said:
If the homeowner has a title for their home listing them as the sole owner, then they can tell the bank to DIAF.
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Except when they arrive at the door with the sheriff and a foreclosure notice signed by the appropriate authority...it happens (fortunately, not very often) and the house gets sold before the legal owners can get a court judgement to stop it.

All that kind of bullshit aside, (because as I said, it happens very seldom) my biggest bitch isn't the banks foreclosing on mortgages, but rather with the government bailing out the big banks who gambled and lost on mortgage-backed financial instruments. THEY should have to take the same kinds of hits that the homeowners have to take when the economy goes south.

In one of my college classes in 2009, we saw a presentation/film/ (??) from one of the big economists/financial gurus that explained that the government could have bought up all the bad/underwater mortgages that were due to foreclose or predicted to go into foreclosure...kept people in their houses, prevented MOST of the big banks from going under, prevented the housing bubble collapse and resulting near-collapse of the economy from being as bad as it has been...and not spent as much taxpayer money. Yes, the payback from the homeowners would have taken longer...as people paid off their mortgages, but the economy wouldn't have taken nearly as big of a hit as it did when the government bailed out the banks with taxpayer dollars...and the banks proceeded to hoard the money, causing further damage to the economy as credit got tighter and tighter, plus they paid it out in obscene bonuses to executives who caused the financial problems to begin with...would SOME of the mortgages still have been foreclosed? Yes, as people lost their jobs and didn't find new ones, but it was predicted that the foreclosure rate would have been only slightly higher than it had been before all this started...and fewer people would have lost their jobs as the economy stayed stronger. Adjustable mortgages wouldn't have adjusted, or the adjustment would have been much smaller, and more people could have afforded to keep their houses.

A pipe dream? Perhaps...I don't remember all the particulars of the film/presentation, but bailing out the big banks instead of the homeowners didn't make sense then...and it doesn't make sense now.

If "Wall Street" wants to privatize gains, they should also have to privatize losses instead of depending on the taxpayers to cover their gambling debts.
 
Ronstang said:
The bottom line is people are stupid. They make bad decisions then blame everyone but themselves when the predictable outcome is reached. Ask Dave. If people weren't so greedy they would buy a modest house that they know they could afford in almost any situation, but that is not what happens in reality. If you are married and both working you should only buy a house that you can keep with only one of those incomes.
Click to expand...

This. Although, the banks do have some culpability. I remember when we first started looking for a house they kept saying we could afford a house 300% more than what we were looking for. We laughed at them and asked if people really fell for it. Some years later when both our jobs went over the border, we were very happy we didn't go that route.

Also. The whole "liberals vs conservatives" thing needs to die. People are dumb on both sides and it's so 1950's.
 
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spidey07 said:
It is YOUR responsibility to read what you sign. There are tons of laws on disclosure that when buying a house it must be explained to you in very clear terms. If after all that, you still agreed to dumb ass terms, well that's what life calls "the penalty for being stupid".

And LOL at "inconvenient" to pay your bills. It is as simple as you owe X and didn't pay, otherwise all the hoops needed to be jumped through to foreclose, all the notices, all the legal certified deliveries notifying you of such, wouldn't have been jumped through.

But please do describe this fine print you're talking about. Have you ever bought a home? There are tons of things you need to sign and understand. Remember that penalty for being stupid thing I talked about? Yeah, the biggest one is not reading what you sign, especially when there is a lawyer right there who can answer your questions and explain everything as a neutral arbiter.
Click to expand...

Its much more complicated than it needs to be, Spidey. As I said, if it were as simple as the math, it wouldn't be a problem. With an X year fixed mortgage at Y% interest annually, even someone with a high school education could calculate their payment each month, their remaining principle, even the amount of their payment that is going towards interest and principle respectively. You shouldn't NEED a lawyer to understand/sign a mortgage. That alone is evidence of it being too complicated for the average person. Sure, the law says that everything must be explained in clear terms, but that is only a veneer of clarity.

Inconvenient to pay bills? Hardly. Paying bills is easy, so long as you don't have to pay the "to whom do I send the check this month" roulette. At least with power/phone/cable/water/etc., you can send that check to the same damn place without having to worry about it. Mortgages? Not so much. They are bought/sold to competing financial institutions, which themselves have been getting merged/bought out at a dizzying rate. Hence, you may pay bank X one month, bank Y another, and bank Z later on. There is huge room for error there.
 
MovingTarget said:
Its much more complicated than it needs to be, Spidey. As I said, if it were as simple as the math, it wouldn't be a problem. With an X year fixed mortgage at Y% interest annually, even someone with a high school education could calculate their payment each month, their remaining principle, even the amount of their payment that is going towards interest and principle respectively. You shouldn't NEED a lawyer to understand/sign a mortgage. That alone is evidence of it being too complicated for the average person. Sure, the law says that everything must be explained in clear terms, but that is only a veneer of clarity.
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I don't agree with Spidey very often, but I'll back him here. If someone doesn't understand the terms of a contract, they shouldn't sign it, period. If a borrower doesn't understand the math of an ARM, they should be going with a fixed-rate mortgage that they can understand.
 
I didn't over-extend or borrow against my home during that mess despite the constant barrage of loan approval letters I would get in the mail practically every single day. You've been approved for a loan of $250,000.00!!! Right, and how exactly am I supposed to pay for that loan? I just threw them in the trash and I still have my house.

Funny, I never get those letters anymore. What has changed? 😕
 
The Federal Government forecloses on the majority of homes.

Over 50% of homes are owned by the Federal Government, the banks service the loan and foreclose on the loan for the Federal Government. The Federal Government could stop these foreclosures if they wanted to, but they don't.
 
spidey07 said:
Because they're fucking stupid, that's why.
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Nailed it.

Banks are handing out money too easily. Too lax on the lending restrictions.
Banks aren't going to protect the stupid, it's up to the stupid to pay.

Up here in Canada with a high credit score, only debt being a car payment, and at the time an income of about $55,000 the bank would only give me $155,000 for a mortgage. In the US I bet you could get like half a million on that wage with how easily money was being handed out. I believe this has improved though recently? Banks being more stringent?
 
the federal government owns over 50% of all mortgages?

the banks did pay back the money that was loaned to them btw - I'm not defending the banks here, by the way - they share an equal portion of the blame IMO for giving loans to people that had no business getting them in the first place - people aren't going to say no to money very often, smart or not.
 
This is why the 1% control the 99%. Maybe those idiots should occupy a job instead of the street?
 
spidey07 said:
It is YOUR responsibility to read what you sign. There are tons of laws on disclosure that when buying a house it must be explained to you in very clear terms. If after all that, you still agreed to dumb ass terms, well that's what life calls "the penalty for being stupid".

And LOL at "inconvenient" to pay your bills. It is as simple as you owe X and didn't pay, otherwise all the hoops needed to be jumped through to foreclose, all the notices, all the legal certified deliveries notifying you of such, wouldn't have been jumped through.

But please do describe this fine print you're talking about. Have you ever bought a home? There are tons of things you need to sign and understand. Remember that penalty for being stupid thing I talked about? Yeah, the biggest one is not reading what you sign, especially when there is a lawyer right there who can answer your questions and explain everything as a neutral arbiter.
Click to expand...
It's also the burden of the homeowner to choose a lender. I have no sympathy for the banks or the homeowners unless the foreclosure has to do with unemployment.
 
The real answer is because the rules have ended up changed.

We are in a capitalist society...the poor want a socialist society.

Bankruptcy and foreclosure are key elements to a capitalist society.

However, today bankruptcy is crippled and in foreclosure instead of just taking the collateral, the banks now want money on top of that.

That is the issue.
 
I never understood that either. Pay your bills, and your services will keep working. Pay your mortgage, and you keep your house. Not rocket science.
 
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