TommyK Posted December 3, 2009 Share Posted December 3, 2009 I heard this over Turkey Dinner: A couple was having trouble making their mortgage payment due to a lost job. They knew they could continue making somewhat smaller payments, so knowing their bank had been the recipient of a gazillion dollars from the Federal Government to help people in this situation, asked the bank for a mortgage modification. "No," said the banker, "We prefer to go to foreclosure." At their wits' end they took the bank to court to see if the courts would enforce a modification. The judge heard both sides, including the amount of money accepted by the bank that they had been sitting on. The judge asked the bank's lawyer, "I would like to see the mortgage contract and the deed." The bank's lawyer complied. Whereupon the judge tore up the mortgage, handed the deed to the couple's lawyer and said, "Folks? You don't owe the bank a dime." Fact? or Fiction? I really don't know. Has anyone seen this in a bona-fide news article or news site? Link to comment Share on other sites More sharing options...
RichCI Posted December 3, 2009 Share Posted December 3, 2009 http://www.foxnews.com/story/0,2933,577105,00.html Link to comment Share on other sites More sharing options...
sjl200 Posted December 3, 2009 Share Posted December 3, 2009 FACT ......... Link to comment Share on other sites More sharing options...
NeoConMan Posted December 3, 2009 Share Posted December 3, 2009 Very true story. That judge should be disbarred, and his *** kicked daily until he begs for mercy. Link to comment Share on other sites More sharing options...
RichCI Posted December 3, 2009 Share Posted December 3, 2009 Neo, if it weren't for the fact that that bank took bailout money, I'd agree with you. But they did and none of those c-sucking banks who were bailed out want to loosen up lending let alone try to work with mortgage holders who are now floundering. All of them were irresponsibly lending money to any idiot who walked through the door and now they've all done a 180 since their asses are in a sling so they're sitting on cash that was lent to them to survive and continue doing business. It's not like I have a lot of sympathy for people who got in over their heads by borrowing more money than they should have, but I gotta tell you that I'm a little sick of seeing our money be used to bail out banks that made bad decisions while home owners who made bad decisions are thrown out on the street. Link to comment Share on other sites More sharing options...
DanvillRob Posted December 3, 2009 Share Posted December 3, 2009 Whereupon the judge tore up the mortgage' date=' handed the deed to the couple's lawyer and said, "Folks? You don't owe the bank a dime." [/quote'] True story....but... the judge's decision will be overturned on appeal. He doesn't have the authority to invalidate a legal contract. Link to comment Share on other sites More sharing options...
EVOL! Posted December 3, 2009 Share Posted December 3, 2009 Since the bank would not meet them halfway, they should have walked away from the house and let it go into foreclosure. Returning the collateral to the lender is a perfectly ethical way to settle disputes like this. Link to comment Share on other sites More sharing options...
stevef Posted December 3, 2009 Share Posted December 3, 2009 Neo, RichCI.. Normally I'd agree also, you either have the money to pay or you're outa' here... (Hate to say it but with no job right now I've only got a few months before....Well...)... Problem was that the bank and the customer agreed to go to mediation and the bank refused to negotiate (even after an offer to re-purchase the house at "market rates"). The judge was pissed about the way the bank (and it's agents) behaved.... Here's a detailed article from Law.com.... http://www.law.com/jsp/article.jsp?id=1202435781738 Funny thing about the mortgage "renegotiation" is that you have to be way behind before you're even eligible to ask. Seems a little stupid. If you were able to renegotiate prior to being in danger, you'd be able to, as the judge said, supply the bank with a "regular, albeit reduced" stream of income. Link to comment Share on other sites More sharing options...
EVOL! Posted December 3, 2009 Share Posted December 3, 2009 Funny thing about the mortgage "renegotiation" is that you have to be way behind before you're even eligible to ask. Seems a little stupid. If you were able to renegotiate prior to being in danger' date=' you'd be able to, as the judge said, supply the bank with a "regular, albeit reduced" stream of income. [/quote'] This does not make sense to me, either. I have several friends that are underwater (owe more on their house than it is worth) or cannot handle the interest rate on their mortgage. Almost all of them have jobs and could pay if the payments were reduced even a little so why not work with these people to hammer out a deal? That would have to be better than foreclosure, unless the banks want to get into the real estate business. Link to comment Share on other sites More sharing options...
RichCI Posted December 3, 2009 Share Posted December 3, 2009 Good article, Steve; that provided a lot more information than I've previously read about the case. Link to comment Share on other sites More sharing options...
stevef Posted December 3, 2009 Share Posted December 3, 2009 This does not make sense to me' date=' either. I have several friends that are underwater (owe more on their house than it is worth) or cannot handle the interest rate on their mortgage. Almost all of them have jobs and could pay if the payments were reduced even a little so why not work with these people to hammer out a deal? That would have to be better than foreclosure, unless the banks want to get into the real estate business. [/quote'] evol... The last thing the banks want, especially now, is to be in the real estate business.. In the 1970s, when interest rates went crazy, it sometimes made sense for banks to play in real estate. Many homes were purchased with significant down payments so even if the back had to play Century21, they stood to make some money on a sale. ($50k house, $10k down, bank could make $10k just selling the place). There's an ex-coworker of mine down in southwest Florida whose development has 2 in 5 houses empty and bank owned (lot's of these were "walk aways", IE: no equity, strip the house, ac/plumbing/electrical/heat/appliances/whatever and "walk away". They make 0 on them, usually have to maintain them and can't sell 'em for even the mortgage value, can't even rent any of the stripped ones. Would have made more sense to stretch the term, or something just to keep the cash coming in but.... If you read the article, or called Chase like I did, they don't give a sh1t. In my case we own over 50% of the house, so they really don't want to listen. They stand to get their money, it's us that'll lose the equity. Link to comment Share on other sites More sharing options...
EVOL! Posted December 3, 2009 Share Posted December 3, 2009 evol... The last thing the banks want' date=' especially now, is to be in the real estate business.. [/quote'] I hear you. For the banks, by not at least attempting to work with its clients, they are getting themselves into the real estate and home maintenance business. Link to comment Share on other sites More sharing options...
myspace.com/jessenoah Posted December 3, 2009 Share Posted December 3, 2009 It's not like I have a lot of sympathy for people who got in over their heads by borrowing more money than they should have' date=' but I gotta tell you that I'm a little sick of seeing our money be used to bail out banks that made bad decisions while home owners who made bad decisions are thrown out on the street.[/quote'] that is the ticket right there! if the bailout didnt get the banks on the right path, let the bank fail! Link to comment Share on other sites More sharing options...
NeoConMan Posted December 3, 2009 Share Posted December 3, 2009 Yep. Failure IS an option. There's all this talk resulting from an 'entitlement' mindset cultivated in this country that has steered people away from reality. The people living in the house couldn't meet their obligations - it's THEIR problem. The banks make risky loans over and over and are surprised when people default - it's THEIR problem. Rich, you and others are under the misguided notion that I support the banks in this bailout. Nothing could be further from the truth. What did bailing out these companies do for us? Anybody really surprised that it's "business as usual" for those companies who are still alive? Many of them were in no danger of failing - they took the TARP money for competitive reasons. The ones who were gonna fail, should have. Once they received the taxpayer (ME) funded Christmas gift in the form of a big sack of money, all they did is redefine their strategy to position themselves better in the marketplace and most of the decisions they make that get them all the bad press are driven by two things ONLY - shareholder profits and taxation liability. If their tax burdens were not so cumbersome and Draconian, they could make more sensible business decisions in the long term interest of the shareholder and customer alike. As long as those managers feel like they are drowning trying to "save" their company and position themselves for a better job next year, not a damned thing is gonna change. We keep hearing about how we need a government program to "protect" people - and bailouts for companies. There's been a program in place for decades - it's called BANKRUPTCY. Oh no!!! We can't have THAT! The stigma attached to it is there for a reason - anybody you owe money to gets fxcked. But it's different if the money is "free" because it came from the government - you don't have the shame. Sure is easy to let ME pay for it, eh? Oh, and judges get on the bench for life and nobody can touch them when they make stupid-*** decisions. No problem? I disagree. Link to comment Share on other sites More sharing options...
myspace.com/jessenoah Posted December 3, 2009 Share Posted December 3, 2009 their obligations - it's THEIR problem. The banks make risky loans over and over and are surprised when people default - it's THEIR problem. on the other side, if a bank refuses to loan a less then qualified person a loan, then there is racism/sexism/unfair card to be played and then the bank gets a bad PR picture painted........... these are so many angles to look at in stories like this. The world we live in makes me want to move up to the mountians live alone off the land! well, maybe find a nice mountian-eer girl to live with Link to comment Share on other sites More sharing options...
EVOL! Posted December 3, 2009 Share Posted December 3, 2009 on the other side' date=' if a bank refuses to loan a less then qualified person a loan, then there is racism/sexism/unfair card to be played and then the bank gets a bad PR picture painted...........[/quote'] Where did this come from? Link to comment Share on other sites More sharing options...
cookieman15061 Posted December 3, 2009 Share Posted December 3, 2009 Where did this come from? Acorn Link to comment Share on other sites More sharing options...
Cruznolfart Posted December 3, 2009 Share Posted December 3, 2009 The world we live in makes me want to move up to the mountians live alone off the land! If I had a nickel for every time I heard someone say this. Trust me, you're much better off living where you don't have to kill or grow everything you eat. "Living off the land" is something city folks say without thinking about what kinds of skills it requires in order to survive. But I'm in agreement with your sentiment...matter of fact it's pretty much why I came up here way back when...to live off the land. Link to comment Share on other sites More sharing options...
Californiaman Posted December 3, 2009 Share Posted December 3, 2009 It has to be true, it's on the internet, right? Link to comment Share on other sites More sharing options...
stevef Posted December 3, 2009 Share Posted December 3, 2009 It has to be true' date=' it's on the internet, right?[/quote']Urban legend? Nah, it was in the newspapers (maybe even the NY Times- you know how reliable they are) around here while it was going on.. Link to comment Share on other sites More sharing options...
milod Posted December 3, 2009 Share Posted December 3, 2009 Actually in ways, I think we're likely mostly in agreement if anyone is sufficiently interested to read down this far. The "banker" will do what it takes to ensure maximum stockholder returns so they keep or get a better position. The householder hit with increasing taxes and a house with its value destroyed by local economy - been there - is between a rock and a hard place. Pay extra to dump the place - my decision - or allow foreclosure, or file bankruptcy. The "winners" in this are the real estate sales people and the banks whose accountants can figure how to mess with the figure to their advantage. A lot has to do with who can hold on, or get help to hold on, long enough to minimize tax exposure and maximize stockholder value. It's how the big accounting companies got big and why what some big corporations do that makes them bigger in spite of counterintuitive sorts of business practices that would put a small business into bankruptcy. Such a life, anyway. But this ain't unique. The "panic" of 1873 was very similar in cause other than that it started with oversold "growth" and no tax advantage for "losses" or government bailouts. A lessening "real" money supply and high debt loads brought disaster. Unemployment in '76 was estimated around 14 percent. Wages in existing businesses dropped. Then people wonder why there were gold rushes where something of value might be found by men with no other mode of making a living? m Link to comment Share on other sites More sharing options...
max2343 Posted December 3, 2009 Share Posted December 3, 2009 The Judge was Right. Where is our Bail-out or Some help for What they have done to us. The Monies our Fearless leader has givin away is Equal to giving 40,000.00 Dollars to each and Every us Citizen. If that was Given, we all would be better off or just pay off or Forgive 10's of Thousands of an everyday Shomo's Debt. Ya that would be the Ticket. Link to comment Share on other sites More sharing options...
stevef Posted December 3, 2009 Share Posted December 3, 2009 Actually in ways' date=' I think we're likely mostly in agreement if anyone is sufficiently interested to read down this far. The "banker" will do what it takes to ensure maximum stockholder returns so they keep or get a better position. The householder hit with increasing taxes and a house with its value destroyed by local economy - been there - is between a rock and a hard place. Pay extra to dump the place - my decision - or allow foreclosure, or file bankruptcy. m [/quote'] No offense, cutting off the end of your post! Problem here is that Indymac did not do anything for it's stockholders or adhere to NYS reguations (these regulations have been in effect for years, I don't know if they were significantly modified recently due to the "crisis"). They refused an offer for re-purchase at market rates as well as other remedies offered by the householders. Any of the offers would have kept an income stream to the bank. With the housing market the way it is any functioning mortgage means income to the bank (stockholder returns). Foreclosing, without likely prospect of sale means the bank's stockholders get bupkes. The Law article I posted about the case shows why the judge was pissed. It had to do with NYS regulations involving pre-foreclosure mediation. The only TARP relationship it had was that had the bank negotiated, according to the judge, in good faith there would have been no bail out monies required for this property, the mortgage backed security would have taken a hit, but would still have been active (instead of being a total loss). Link to comment Share on other sites More sharing options...
EVOL! Posted December 3, 2009 Share Posted December 3, 2009 Acorn Ah, those pesky socialists. They're lurking everywhere. Better check under the bed before you turn in for the night. Link to comment Share on other sites More sharing options...
milod Posted December 3, 2009 Share Posted December 3, 2009 Steve... I wasn't talking about the legalities, or even a normal concept of cash flow. I have this really cynical hunch that with a bit of creative accounting, a goodly number of the folks involved in helping encourage the crash will survive quite comfortably. Legalities? Hey, these guys wear shirts that cost more than my suits. If this tale is true... heck, it still will be a writeoff. My cynicism suggests that victory and a goodly parachute protection will take care of the big guys. But then again... Perhaps I get too cynical at times. Compared to previous "crashes," I think the difference today compared to a century ago is the tax code and... there we are with the accountants again. We'll see. m Link to comment Share on other sites More sharing options...
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