Comments on: Mortgage Mess "Hitting Home Early"

The Early Show's Ray Martin, Other Experts Try To Help Desperate Homeowners

[tommy_tunes]

Some comments are true about not having any sympathy but you are not talking a few people, you are talking tens of thousands. Not all wanted the moon and the stars, some only wanted a place to live and they were told it was in their grasp. Dangle the Apple and someone will bite. I am basically disgusted with the methods used to lure these young families into these situations.

[toddspfld1]

Lenders do not want to foreclose on homeowners. The financial loss to the lenders from foreclosure can be on average $30,000 to $60,000. What can be done for homeowners in crises? First and foremost homeowners must decide if they can afford the home. If the owner cannot afford their payment they should sell their home. If the owner has the ability to make payments they need to call their lenders directly. When they call they will nearly always get the collection department. When the call they need to ask to be transferred to the company%u2019s Los Mitigation Department, the Home Retention Department, or the Work Out Department. Those departments will ask for personal and financial information. What are the choices available to the owner? The first unfortunately is foreclosure. The next option is to sell the property. Even if the owner owes more money than can be made by selling many lenders will accept lower payoffs. The third option is a repayment plan. Forth is a Reinstatement pan. Fifth is Forbearance. Sixth is a Loan Modification Plan. Seventh is a Deed in Lieu of Foreclosure. The Eighth and newest option is a reverse mortgage. Bankruptcy is one of the worst ideas. Even if a homeowner is foreclosed that is not the end. Many lenders will grant %u201CCash for Keys%u201D.

[skaternum]

My favorite comment: "The $215,000 price tag ''tells me we''ve got a problem,'' Nicholson says. ''It tells me this government has a problem, because this isn''t the only town that''s suffering, and this is a pretty small town.'' "

Um, no. I was feeling somewhat sympathetic until I heard this on the show this morning. Why is it the *government''s* problem? You borrowed too much money that you cannot repay. You helped create this situation. YOU believed the word of a salesman (selling a mortgage) instead of trying to find out the truth about the deal you signed. Turns out, it was a deal with the devil.

I also love how she bought a new car! What the heck was she thinking??

[shahnmarcue]

boo hoo. What do I get for not falling for this kind of financing. I get to keep a home I can afford.

[janes37]

I am so tired of the blame being placed on the banks, the realtors, the corporations. They are businesses-if a car dealership tells you that yes, you can afford three new cars do you buy them? Or does that seem ludicrous. Why do Americans no longer rely on hard work and sensible economic decisions, and instead rely on government bailouts and litigations. If you can''t afford it then don''t buy it. Period. And never ever sign a piece of paper at the bank without completely understanding it. It''s not rocket science people, it''s common sense.

[pattisaid]

Yeah we should blame the "large corporations" AND the unscrupulous lender or brokers. It''s ALL their fault these people signed these horrible loans. Actually what makes me sad is that there are honest brokers out there who didn''t get loans due to the fact that that Lending So and So could also offer airline tickets and other free stuff and a song and dance along with this great rate and a special fluffy loan. OooooH so fluffy. Actually all these people who got screwed got what they wanted when they got their loan which is the money they wanted and the bills paid and a trip and a gift card and flight tickets. If they did not get a loan from one place they went to where they could get the loan. Still no sympathy.

[pattisaid]

I have no sympathy for these people that are losing their homes. I saw first hand the greed of the borrowers as the value of their homes increased. There were some people who would purchase a car in the middle of a refinance. Then be upset when their fico dropped in the middle of the transaction and no longer qualified for the better interest rate on a cash out loan and still took the loan. Then there were the letters of explanation for why they needed a Tiffany''s account on top of all of the other credit checks. They were lucky they did sell the home. But the materialism of these people amazes me because they have all of the toys. Or the guy living in an exclusive neighborhood that wanted to get the rest of the equity out of his home (his words). This man and his wife made 10,000 a month! They were in debt and he still wanted to do more remodeling to get more value as the value was going down in their area. So many people refinanced to do the right thing at first which was to pay bills. But then the home values went right through the roof and so did the feelings of grandeur of the borrowers. Everyone wants what everyone else has. Once the bills were paid then the whole cycle starts over again. We NEED a new car, just use the charge....

She could look at having roomates or trading the home and what the financial expert said. She is only almost two months behind. But of course we all see she needed a new car. Whatever.

[achambers7]

I can''t believe these people comments. Who are these people with all the answers. Obviously they are independently wealthy. It''s easy to have the answer when you have money. People in glass houses shouldn''t throw stones. They are the people who stepped on someone like Lori or myself to get where they are today. Give me a break.

[achambers7]

I can understand Lori situation. I am also in this same situiaton with WAMU. My advice. don''t move out in the middle of the night. This economy has really gotten us in a mess. the problem is everything has gone up except our salaries. "Project Lifeline" is a new Bush proposal that is suppose to help us. Talk to the Loss Mitigation department and they will work with you. You are not alone. Hopefully, WAMU will negotiate a new loan for you so you can keep your home. We are still trading phone calls, but I have been talking wiht some helpful people that work at WAMU and hopefully my end result will be favorable. Why would they want our homes when there''s no one out there to buy them. Good luck.

[tommy_tunes]

In my opinion, and based on my daughters situation in purchasing a new home, I blame some of the large corporate home builders. My daughters home builder, one of the largest in the nation, actually told my daughter that she could afford the payments on her old home as well as the new one. They only care about making a sale and not the consequences or what happens to these young kids. The entire home purchasing process as far as warranties, etc. all need to be investigated. Home builders are inferior homes knowing that most people don''t understand the warranty information provided and or the process as to how to handle it. Most home owners simply give up trying to get things fixed in their homes because the home builders take so long to fix things. Most young people can''t afford to take off from work to get the things fixed. We need legislation that allows homeowners to with hold 10 or 20% of the cost until all repairs are satisfactorily repaired, as well as a 30 day timeframe for having repairs made.

[liselle3]

One last comment on the previous comment, the banks are not responsible for poor judgement of the individuals.

[liselle3]

A good portion of this mortgage mess is due to the bad judgement and fiscal responsibility of individuals. Using the equity of your home to fund expensive remodels, payoff of car loans and credit cards is only asking for trouble. You could have seen the writing on the walls many years ago when this type of financing was rampant. The trouble with Americans is they want everything right NOW... big 2000+ sq ft homes, new cars, boats and loads of nice furniture. What happened to living within your means?

[fhaguy]

She borrowered more than she could afford to borrow at terms that should not have been allowed. Lending money obviously does not work well when the borrower is deceived, lied to, coerced, persuaded or knowingly chooses a loan that allows negative amortization at maximum loan to value. Responsible lending dictates that the borrower first demonstrate a willingness and then an ability to repay the loan they are applying for.

In Lori''s case, an analogy is that people in hell want ice water. She should not have been offered a loan nor an amount that she could never repay. Had she dealt with an ethical advisor she would have realized she had to sell the house. The guy that wrote this loan deserves to go to jail long before Lori does. There are a lot of people that deserve to go to jail before her.

That being said, a cheap calculator would show you that she cannot afford to stay in this home under any terms unless there was a significant reduction on her existing principle amount. That would be a bailout and she certainly doesn''t deserve that either.

[studentgirl]

i am really amazed at the ignorance of the last state ment,(mududdle3)about their irritation with HER! let me enlighten you. people are told by greedy and soulless real estate professionals that these types of loans are the answer to all their problems and not to worry about the terms because they can re-fi before the terms affect their loan. they also tell borrowers that making the minimum payment on time every month will improve their credit rating, and allow them to re-fi for a more favorable rate in the future. ALL OF THOSE STATEMENTS ARE HALF TRUTHS!!! THE INTEREST ONLY LOAN IS LOAN SHARKING AND SHOULD BE OUTLAWED!!! every month that you don''t pay the FULL interest payment the remainder of the interest you owed is applied to the principle and you then pay interest on the unpaid interest...that is loan sharking.. the banks won''t break your legs but they will take everything you own and leave you homeless on the streets. next half truth, the only way making your payment helps your credit is if you pay the full amount of the interest payment. otherwise the interest being added to your principle every month causes your asset/debt ratio to decrease which in turn affects your creditworthiness.I think if blame must be placed it deserves to be placed on all, BROKER,BORROWER,SALESPERSONS,AND LENDERS!!!!!! ALL SHARE THE BLAME. I am not suggesting that all real estate professionals are like this, i am suggesting everyone pick carefully.

[mududdle3]

I am furious that people like this woman have tanked our economy out of their greed and stupidity. I have a mortgage. When I applied for my mortgage and then again at closing, I was given a stack of disclosures that I had to read and sign that explained the terms of my mortgage. I cannot believe that she was not given paperwork that explained that if she chose to pay the lowest of her 4 payment options that she would not be covering even her interest due. She was flat out too selfish to make the hard choices that she needed to make when she refinanced her house. She knew that she didn''t qualify for a standard loan by her own admission, and yet she willingly put herself into the situation she is in now and helped to create the "mortgage meltdown" because she didn''t want to leave a house that she knew she couldn''t afford. There is no such thing as "personal responsibility" in our country anymore...it''s always someone else''s fault when we don''t get what we want now. I am disgusted that CBS is doing such a stilted, one-sided view of a crisis that was brought on by nothing short of greed and a feeling of entitlement by the borrowers, not the lenders. I don''t believe there are any lenders anywhere that have forced borrowers to take out toxic loans...those borrowers have made those bad choices for themselves, and now the rest of us are left to clean up their messes.

[cfhunter61]

The tragedy here is The woman clearly borrowed more money then she could afford, if she could not afford to borrow over 300,000 at a 15 or 30 yr fixed, she should not have borrowed that much money. She probably had to buy the husband out at the peak of the market, and would have done better to sell and buy something she could afford. Lenders have perpetuated the myth that your house can function as a revolving line of credit rather than being an asset you should seek to own as quickly as possible to weather bad markets and job losses. There''s no such thing as free money. Lori should have asked the simple question "when will this loan be paid off" the answer would have been "never". Recently, there has been much said in the media about teaching your children about credit, about how to manage your credit scores, what REALLY needs to be communicated is the value of living below your means and not above them so there is some kind of financial future.

[tntwess]

I have a deed. I have a mortgage. I cannot live on the property. I cannot sell the property. Don''t be too quick to judge her situation. Sometimes pressure comes from places you can''t imagine. It wasn''t her job to be an expert.

[justacommen1]

When she refinanced 6 years ago she could %u201Conly qualify for a certain loan%u201D. If she didn%u2019t take that option her other choice was simple. Sell the house and move. But she didn%u2019t. Now she has to.

She bought her house 23 years ago and made payments for 17 years before she refinanced 6 years ago. She should have gotten a clue when her payment went down as much as it likely did with the refinance. How ignorant do you have to be to think $1000 payment make sense on a $334,000 loan? Or, that you can borrow that much more then the original mortgage and think your payment should decrease?

She had a house that appreciated for 17 years while she paid down the first mortgage creating a substantial amount of equity. Then, SHE chose to tap the equity from the appreciation and payments. She likely borrowed 100%+ of the value of the home to %u201CRemodel%u201D (that likely increased the value even more), and other items. It continued to appreciate for the next 6 years and she%u2019s STILL upside down on the mortgage. Even with the recent drop in housing prices, that math doesn%u2019t work.

Mr. Martin, as a fellow %u201CFinancial Expert%u201D, I am ashamed that you didn%u2019t hold her to task in the least. Yes, they shouldn%u2019t have solder her the loan, they should have told her to move. She should have sold the house the year she got divorced, not remodeling and borrowing the maximum amount she possibly could.

[sneill1]

I feel sorry for this woman but it sounds like she wanted to keep the house and get money out of it to settle with her husband but didn''t have the financial means to do that without selling the house. After 23 years she would have had only 7 years left on the mortgage(mostly principal at this point) and I am willing to bet that her payments were lower and fixed. She is not a first time mortgage owner who did not know to read the contract and question the terms. Anyone can figure that a loan of $334000 paying $1079 per month back is about 25-26 years and that is just principal. When do the banks collect their interest - up front on homes, cars, most everything. It is a crappy situation when families split up but it sounds to me that she walked into the situation knowing that she was paying interest only and that an A.R.M. means "adjustable" - usually UP. I am getting older and am paying off my bills and saving money for retirement but I can''t seem to get ahead on interest rates because of the irresponsible spending of a small percentage of the country and the media screaming we have to reward bad behavior or poor judgment.

[teealigo66]

I can NOT believe the so called "help" you gave that women!
Why in the world is that SOB of a morgage broker not in jail for fraud!?!? You are not helping her, ...you are helping that *** collect more ''blood money''! You and our government should be ASHAMED of yourselves for this kind thing even happening in this country! Where are your morals???? The ''mob'' goes to jail for these kind of ''antics''!
You wonder why people walk into places and shoot everything that moves! NOW YOU KNOW!!! You can only push people so far before they break!