| Jan 16 @ 9:37 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down!
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MusicMonster
Posts: 2,954
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This term is flying around a lot, and there are even a lot of lawsuits being initiated against various financial institutions for this practice. Even polititicians are vowing to terminate this manner of fraudulent lending. But that's about as far as most common definitions go. Clearly though, the country is in Mortgage Meltdown with unprecendented levels of foreclosure. A National Crisis of major proportions.
But how is the Average Joe supposed to identify a "Predatory Lender" in order to avoid this sort of destructive scenario? What about a lender might tell you, I am a Predator! I am not in your corner! Stay Away??
-MM 
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| Jan 16 @ 9:40 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down! |
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eastham
Posts: 6,317
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It's hard, predatory lenders don't wear trenchcoats and stand in alleyways.
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| Jan 16 @ 9:43 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down!
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iam7545
Posts: 4,151
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MM - there will be no more predatory lending now! No need to worry. The lawsuits are one more example of people not wanting to take responsibility for their actions. People are required to sign many papers at a mortgage settlement. They knew what they were doing.
The only way to have prevented this would be to give people intelligence tests and if they failed - not allowed them to buy a house or refinance!
Just like the dot com stock market boom in the 90's the uninformed become roadkill. Next thing you know losers will want to sue the casinos!
[Edited on 1/16/2008 9:52 AM]
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| Jan 16 @ 9:51 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down! |
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kjac
Posts: 5,484
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In Ohio, there are predatory lending laws being hammered out as we speak. But predatory lending doesn't just apply to mortgages. Many other types of loans fall under this label as well.
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| Jan 16 @ 10:05 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down!
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MusicMonster
Posts: 2,954
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It's hard, predatory lenders don't wear trenchcoats and stand in alleyways.
Well put!! Ironically there needs to be a way to know what to look for "other" than a trenchcoat and sunglasses.
People are required to sign many papers at a mortgage settlement. They knew what they were doing.
In reality I beg to differ. I would suggest 1 in 25 actually read all they are signing. There simply isn't time, or closings would last hours.. The only way to do that consistently would be to get all the documentation well in advance.
-MM 
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| Jan 16 @ 10:09 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down! |
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iam7545
Posts: 4,151
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In reality I beg to differ. I would suggest 1 in 25 actually read all they are signing. There simply isn't time, or closings would last hours.. The only way to do that consistently would be to get all the documentation well in advance.
MM - if people do not understand what they are signing - we should pass laws forbidding them from signing any contracts. What kind of non sense is that? Are you suggesting we cannot trust peoples intelligence? They have plenty of time before settlement to understand what they are agreeing to.
So you are saying people can sign anything and then sue? 
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| Jan 16 @ 10:15 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down!
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kjac
Posts: 5,484
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I always told my soldiers before signing any deal, take it to a lawyer. Some deals are scripted to screw anyone without legal knowledge. And if you can't afford a lawyer to check it out, you probably can't afford the loan.
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| Jan 16 @ 10:51 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down! |
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DiamondRain
Posts: 4,865
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What does predatory lending mean to me?
It means a whole lot of whining greedy bastards who defrauded lenders by buying houses they know they could never afford to buy and stealing someone else's money with the promise to pay it back when they knew they never could.
I'm sick and tired of whiny con artists like these borrowers who don't take any responsibility for their own greedy behavior and then expect the government to help them with money the government confiscated from the hard labor of the working man.
That's what it means to me.
People who took out loans they could not repay should be put out on the street. Or better yet, in jail for theft and fraud.
How does the "Average Joe" avoid this? SIMPLE ... don't buy a house you can't afford. What do you expect is going to happen when you earn $30,000 a year and buy a $1 million house? Shouldn't lenders at least be able to assume a borrower has a brain?
.
[Edited on 1/16/2008 10:57 AM]
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| Jan 16 @ 11:01 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down!
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iam7545
Posts: 4,151
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DR - you better tell Senator Charles (Hairplug) Schumer to stop his welfare legislation to bail these people out!
Maybe if they renamed it Predatory Borrowing then buffoons like Schumer would get it!
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| Jan 16 @ 11:10 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down! |
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DiamondRain
Posts: 4,865
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What a waste of hair plugs that jerk is. I'm embarrassed to live in his state.
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| Jan 16 @ 11:14 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down!
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thegoodideaman
Posts: 1,915
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the banks should be absolved of all responsibility in these matters,
there's no way for them to tell if a person can pay off a loan...
to do that you need like a calculator or something...
if there where just some way to control who you lend money to...
but the way it is now, it's just a persons Handshake,
then ya let them into the Vault with a suitcase...
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| Jan 16 @ 11:27 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down! |
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DiamondRain
Posts: 4,865
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LOL! Good one good. 
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| Jan 16 @ 11:38 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down!
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Gallows_Humor
Posts: 7,784
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 ... Iam..Diamond.. are you mortgage brokers??
predatory lenders is a nice way to say "lenders who decided that making the loan and getting their fee's was the most important part of the process.."
the fed's have so many rules in place to make sure that people who are bad risks should not be given loans..
and as fast as the fed's came up with new rules.. predatory lenders figured out ways to bypass them..
someone could not afford the payment..?? no problem.. artificially lower the payment for the first couple of years.. and make the loan..
someone did not have the cash for closing costs?? no problem just tack it on to the principle.. and make the loan
someone did not nave the cash for a down payment?? no problem.. give a second trust deed to cover the lack of funds...and make the loan
and the most important part of it... If the lender was thinking that this was not the right thing to be doing...no problem .. he would just tell himself that there was a lender down the street doing it.. so..two wrongs do make it right.. so make the loan
so .. now we have the bubble bursting.. And..what do the lenders do? They say.. hey it wasn't our fault..as the people should have read the fine print...
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| Jan 16 @ 11:52 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down! |
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MusicMonster
Posts: 2,954
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How does the "Average Joe" avoid this? SIMPLE ... don't buy a house you can't afford. What do you expect is going to happen when you earn $30,000 a year and buy a $1 million house? Shouldn't lenders at least be able to assume a borrower has a brain?
Point taken.. Only unfortunately it's not nearly that simple.. You don't find that situation among all the defaulted loans in the country right now. It isn't merely about buyers who are too stupid to be buying a home in the first place. 
I agree with Kjac about a lawyer, but that isn't usually done because that would require two separate closings, which cost extra money and time, and these deals move along very rapidly. One closing is usually trauma and expense enough for anyone. It is of course usually in a person's best interests to own, if at all possible.
Now back to the original topic.. How is one supposed to know in advance they are likely dealing with a predatory lender for their $140,000 house, vs a reponsible lender? There's a lot more to it than buying a house you are too dumb to know you can't afford.
What, in the view of most, are the exact flags to watch for which define predatory practices in lending?
-MM
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| Jan 16 @ 11:52 AM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down!
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iam7545
Posts: 4,151
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GH - WTF are you talking about this time?
People have the responsibility to manage their money. The law actually says that if one applied for a loan and meets the requirements the lender HAS to give them the loan. If they turned someone down because they thought they were FREAKIN DUMB they could be sued. When a lender offers several products any borrower has access to each.
I have friends that took out these interest only loans and other ignorant mortgages. They did so because they were blinded by the possibility of having their dream home. They do not blame the lender. Some have had to sell and move back to reality.
No one twisted their arm. We live in a free country. If people want poorly manage thier finance they have that freedom.
What, in the view of most, are the exact flags to watch for which define predatory practices in lending?
I think all of the predatory borrowers should not be allowed credit for 10 years!
MM - Mortgage Brokers offer many types of loans. People choose a house that they want and then try to get it financed. The Realtors try to sell them a more expensive home as they are on commission. WHen a Mortgage Broker does an interest only or ignorant balloon loan - the borrower knows that they could not afford the house with a conventional loan.
They are then guilty of predatory borrowing and have screwed things up for all of us!
BEHEAD THE IDIOTS! 
[Edited on 1/16/2008 11:58 AM]
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| Jan 16 @ 12:04 PM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down! |
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DiamondRain
Posts: 4,865
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Borrowers should be responsible for ALL risks.
You don't have any rights to someone else's money. If someone is good enough to do you a favor and take a chance on you and you are going to take someone else's money, the responsibility is 100% YOURS to pay it back.
And it's up to YOU to understand the terms, not the lender. If I am going to lend you money it's darn sure I can set any terms that I want! Don't like it? No hablo Englais? Don't take the money!
You only need to know one thing.
DON'T SIGN ANYTHING YOU DON'T UNDERSTAND. If you need help, hire a lawyer before signing it. If you don't, the fault is 100% YOURS and ZERO percent the lenders.
If you aren't smart enough to spend a couple of hundred dollars to have a lawyer involved before you make a commitment to repay a couple of hundred thousand dollars, that isn't the lender's fault!
Then lender is doing you the favor... if you can't handle the results, don't take the money.
.
[Edited on 1/16/2008 12:14 PM]
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| Jan 16 @ 12:19 PM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down!
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Nightowl001
Posts: 4,087
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"Tired of paying rent? We can put you in a house for less than you're paying now!" (Almost none of these people were buying a house they "knew they could never afford.")
Predatory lending does not apply to just the mortgage market. One of the most egregious examples is in the "everyone-approved" car loans market. I have an affinity for a couple of particular models of cars. I saw one once at one of these dealers' lots when I was driving by, and stopped in to ask what they would sell it outright for. Of course, the price they quoted was way out of line for the vehicle's worth. They then tried very hard to get me to agree to buy it over time (overpriced and all). One salesman actually admitted to me that the company made their profit by selling these overpriced cars on time to people in high-risk credit brackets with few options, and had figured in a high repossession rate, so that when they repo'd the car they could sell it again, and the previous purchaser wound up not having done anything but pay very expensive rental on a car for that length of time. They often had clauses that let them go on to sue the previous purchaser for the remainder of the original loan contract, even though they had sold the vehicle again! The mortgage markets moved into the same mindset when real estate values were climbing and climbing. Every time they foreclosed, the house was worth more than it had been and they wound up basically charging very expensive rent to high-risk borrowers.
Many of the foreclosures going on now are people who bought homes in the 90s, when things looked good and they had no idea that the economy was going to tank like it has. They were expecting their income to rise over time so they could meet automatically increased payments taking efffect 5 or 10 years down the road. "You get raises on your job, don't you?" the lender would ask. Then they would "show" them where on paper the raises they could "expect" to get in time would cover the increasing monthly payment. All the while emphasizing they would be building equity and buying their own home rather than buying a home for someone else by paying rent. I can't find any statistics, but I'd like to see how many of these homes being foreclosed on have been owned for 2 years, 5 years, 10 years.
Unfortunately, one late payment due to unexpected events and little savings in reserve, and they found themselves paying outrageous late fees and interest fees and unable to ever catch back up. I don't know the stats off the top of my head, but somethng like one in three families in this country who lose their income for three months due to job loss or income-negating event would be out on the street?
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| Jan 16 @ 12:27 PM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down! |
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iam7545
Posts: 4,151
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| Jan 16 @ 12:30 PM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down!
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Nightowl001
Posts: 4,087
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So you are saying people can sign anything and then sue?
Incidentally, Iam. You really need to stop commenting on law. Anyone CAN file suit against any legally recognized entity (person, business, incorporated organization; you can't file suit against God or Santa Clause because there is no legal entity to supoena for a court appearance). Whether or not they will win may seem obvious to everyone. The suit may be dismissed as an obvious nuisance suit or having no grounds by the judge before ever going to trial. (In fact, you have enough of those, and you may get charged with contempt of court for wasting the court's time.) But anyone CAN file suit at any time for anything.
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| Jan 16 @ 12:32 PM |
What does Predatory Lending Mean to You? The Mortgage Melt-Down! |
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DiamondRain
Posts: 4,865
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Tired of living? Jump off a bridge!
If you read this, that means you should jump? And if you do, I am responsible?
Just because an ad appeals to someone's sense of greed, that means they are not responsible for their own behavior?
I'm sick and tired of paying for freeloaders who take advantage of someone else's generosity and then whine about it.
Nobody put a gun to their head and forced them to grab the money in their fat little hands.
NO TAXPAYER BAILOUT FOR FREELOADING CON MEN.
[Edited on 1/16/2008 12:38 PM]
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