Amid the Mortgage Mess…

Inquiring minds are reading the WashPo article about how banks and loan service companies are double-dealing their customers and seizing their customer’s homes:

After Valarie Stovall fell behind on the mortgage on her home near Hagerstown, her lender agreed in April to slash her monthly payment by $300, and she immediately started paying the reduced amount.

That’s why, Stovall said, she thought nothing of the yellow flier she ripped off her screen door as she returned from the grocery store one afternoon last July.

“Then I read it and went ‘Oh my God,'” she said. “It was a notice of eviction.”

Across the country, struggling homeowners are increasingly tripped up by mortgage lenders that press ahead with foreclosures regardless of any effort they make to provide borrowers with relief on unaffordable mortgages.

This has been happening for about the last four years.

There is more:

Amid the worst housing crisis since the Great Depression, mortgage companies have established a dual-track approach toward troubled homeowners, negotiating with them over loan modifications while trying to seize their homes.

Top government officials have been urging lenders to redouble their efforts at modifying burdensome loans and have barred lenders from foreclosing on homeowners who are seeking to rework their mortgages under a federal program. Mortgage companies, however, have continued to pursue this two-track strategy, with a widening toll especially on those homeowners who have been trying to resolve their mortgage difficulties before they snowball, according to federal and state officials and consumer advocates.

The new Republican majority would do well to make the banks and loan servicer companies pay dearly for their mistreatment of the American people. A pro-business plan always includes punishment for crooked business people because markets only work correctly with ethics and values. The free market works when the people feel the marketplace is fair and honest.

Not only Harry Ried should hear Sharon Angle’s quip. So with a tip-of-the-hat to Ms. Angle…

“Hey, Republican Leadership! Man up…go get ’em, cowboys!”


2 Responses

  1. I think you are all wet on this. You act as though the banks are sitting on a pile of money like Scrooge McDuck. This is all someone else’s money. It would be impossible for a bank or mortgage company to just cut everyone’s mortgage by $300 a month. You cannot unilaterally change a contract. The bank would still have to pay the depositers their interest and have their money available for withdrawal and they can’t do it if they cut borrowers a break. The bank has no real choice but to evict the lender when they default and try to sell the house.

    • Wow! First of all, thanks for reading and commenting.

      FYI, I am a very pro-business, small gov’t type. I have also been a real estate broker since 1997.

      I am NOT saying, nor did I intimate that banks should be forced to cut people’s mortgages by $300.

      The problem is the bank said they would. But didn’t stand behind it. That is the problem right now. The banks and their service companies promise the homeowners anything to get money out of them and then go right back to foreclosing.

      Since I don’t know your background, please understand…I have worked out short-sales. Seen first hand how the ‘system’ works. It is disgusting, to say the least. Mortgage modifications are basically only used to get a few more payments out of a homeowner.

      Also, these same companies lied to their customers to even take the loan out. I saw loan officers with my own two eyes tell people that they wouldn’t be approved if the bank didn’t think they could pay it back. Then during foreclosure, these same people were told by the same bank that just because they were approved had nothing to do with their ability to pay the loan back. Besides, who lends money to people who they don’t think will or can pay it back?

      All I am saying in this post is that the banks were lying to people and are still lying to people. They promise customers things they have no intention of honoring. Business is a two-way street…both sides need to be held to the same standards.

      You can’t let banks (or any business) get away with lying. And that is what is going on.

      Hope this sets the record sraight. Basically, I am for open, honest, unfettered markets with just enough regulations to keep that kind of system going.

      Thanks again for reading, and especially taking the time to comment.


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