Serin, who was unemployed, lied on all of his mortgage applications to get these loans and even receive cash back at closing.
Serin, who was unemployed, lied on all of his mortgage applications to get these loans and even receive cash back at closing.
View Housing Market Watch RSS feedMany people may be losing their homes to foreclosure because of legitimate financial crises, but there are even more people losing their homes because of lender follies as well as their own greed and stupidity. Here are five stories in particular that will be sure to induce fits of eye-rolling.
Casey Serin--the self-dubbed 'World's Most Hated Blogger'--purchased eight homes between October, 2005 and May, 2006 with the intent of fixing them up and then reselling. Serin, who was unemployed, lied on all of his mortgage applications to get these loans and even receive cash back at closing. At one point, this 24-year-old would-be real estate mogul was in debt over $2.2 million.
Not surprisingly, Serin lost all of his homes in 2007 to foreclosure. News coverage of this was significant. The earliest media stories suggested that Serin may have been a victim of greedy mortgage lenders, but the reporters eventually picked up on the fact that he lied on his mortgage applications and coverage turned negative.
How does a California strawberry picker earning less than $15,000 a year qualify for a home loan of $720,000? That was the question everyone wanted answered last year. Borrower Alberto Ramirez, an immigrant who could not speak English, placed the blame on his real estate agent.
Apparently, the agent was so eager for commission that she arranged this loan through New Century Mortgage and even paid what the Ramirez family couldn't for several months. This arrangement was supposed to carry Ramirez until he could refinance.
But of course, it wasn't the loan that was the problem--this house was simply unaffordable given the borrower's income. Within a few months, the real estate agent quit subsidizing the Ramirez's payments and the borrower quit paying on the advice of an attorney.
A number of sites reported the story of Cynthia Szukala, a story that first ran in the New Angeles Monthly. The story portrayed the newly widowed Szukala as being a sad victim of unscrupulous mortgage brokers.
Szukala claimed a broker took advantage of her and her husband when they made the decision in 2006 to refinance by putting them into an interest-only loan. The writer made sure to mention Szukala's tear-filled eyes and how she had no idea how she'd make the mortgage payments when her loan reset.
After several blogs linked to the story, a studious reader decided to do all of the legwork that the reporter had failed to do. The reader discovered that the Szukalas knew much more about the mortgage business than widowed Cynthia had let on.
In nine years time, the couple had refinanced their loan not just once or twice, as Cynthia had indicated, but seven times. They had been living off the equity for years, borrowing almost $300,000 in all at a rate of some $31,300 per year.
The story of a Fullerton area elderly couple who couldn't afford their mortgage payments sparked huge online debates when it first appeared in the Orange County Register.
Some readers sympathized with the Coffmans who were 60 years old, unemployed and caring for six adopted grandchildren. Others were so outraged at the paper's 'bogus heart tugging drivel' that they demanded the story be pulled.
The debate centered on the fact that the Coffmans got more than $600,000 out of a $97,000 home they bought in 1977. $552,300 of this money came from Countrywide in 2005. The rest of the money was obtained later from other lenders including Washington Mutual, Wells Fargo and Greenpoint Mortgage Funding.
The Coffmans can no longer afford the mortgage payments on the $5,400 per month income they receive from Social Security and government assistance. They also have no money left for a refinance.
Countrywide claims they are not to blame as the Coffmans understood the negatively-amortizing loan they chose. To the Coffman's credit, they admit that they made 'some really bad decisions.
Jeffrey and Vanessa Hahn bought a $475,000 house in 2004 with an adjustable rate mortgage and then took out a significant home equity loan not too long afterwards. In September 2006, the main mortgage interest rate reset, which caused the payment on their main mortgage to jump from $2,200 per month to $3,700 per month.
In March of 2007, the couple got a cash-out refinance of $570,000 even though the required monthly payments for this loan equaled their monthly take-home pay. Needless to say, they made no payments on this loan and subsequently lost their home to foreclosure.
When the San Francisco Chronicle profiled the Hahns, Jeffrey said he was 'shocked' by the number of hate comments that were generated.
'I just don't get how these people can judge me like this...think{ing} we...took advantage of the system. The system took advantage of us,' Hahn was quoted as saying.
Some politicians are in favor of providing assistance to the millions of homeowners who are facing default as a result of poor decision-making and falling home prices. Others are dead set against it. Let's see where the American people stand.
An open letter to all of the lawmakers and taxpayers who think a mortgage bailout is what we need to solve the housing crisis.
To get borrowers to leave a house--and leave it in good condition--mortgage lenders around the nation have begun offering cash for keys. Some lenders are paying out upwards of $3,000.
Democrats unveiled a new plan last week that will allow the FHA to buy $300 billion in delinquent, underwater mortgages. The initial cost to taxpayers is estimated to be $20 billion.
The worst housing slump since the Great Depression is prompting all manner of new bailout plans. Fed Chairman Ben Bernanke encourages banks to forgive portions of mortgage debt, the Democrats propose using billions in federal dollars on buying up bad loans, and the Bush Administration is prepared to dump bank losses on the taxpayers' shoulders.
Should mortgage borrowers at risk of losing their home be given a bailout? What about lenders who face lost profits? Four recent polls ask Americans where they stand on these issues.
If you have followed the news at all over the last few months, then you know that the public has been spoon fed a spate of tearjerker news stories that are meant to paint struggling mortgage borrowers as victims. These stories talk about the importance of staving off foreclosures and helping people who need it, but they very rarely touch on the truth of the matter: most mortgage borrowers were reckless and do not deserved to be rescued.
Are you familiar with home loan terminology like adjustable rate, credit score and interest-only? Knowing this home loan jargon can help you become a savvy home buyer and allow you to better understand a realtor or lender. Read this article for explanations of these home loan terms.
Did you know that you could be required by a lender to have private mortgage insurance (PMI) as part of the terms of your home loan? Private mortgage insurance can raise a homeowner's monthly payments. Read this article to learn the details about private mortgage insurance.