Monday's Laundry: Mortgages on your mind
Conversations with readers from last week about their mortgages, short sales and loan modifications, which mostly, aren’t happening or are going haywire.
The saddest story first: Helen Rudinksy, a Wells Fargo borrower, says she has been trying to modify her mortgage since the fall of 2008. She says her documents got lost a few times in Wells Fargo’s offices and she had to start the process over. Despite her efforts and because she says of delays on Wells Fargo’s part, her home was scheduled to be sold at auction last week.
So she drained her IRA, knowing she’ll face penalties for that, and borrowed money, rushed to the bank minutes before the sale and saved her home.
Next, Wells Fargo told her that she was missing documents and that’s why they were planning to sell the home. But she had check list and a letter documenting that they had received all that was needed.
The kicker: She’s a widow, raising a two-year-old who has autism. She was, at the time of the scheduled sale, across the country getting treatments for her child.
The true meaning of ruined credit: A friend called to say she had indeed sold her home in a short sale. This friend has been in financial peril for some time. What was surprising was what she said is the true cost of ruining your credit. When she rented her new apartment, she had to put down one year’s worth of rental payments. A year’s rent?
The misunderstanding of the Obama plan: A reader from Boynton Beach called to inquire who would qualify for a loan modification under the Making Home Affordable program. Her son, she said, was told he couldn’t qualify. The son’s monthly mortgage payment: $800. Due to loss of his job, his monthly income had fallen to about $1,000- $1,200. What’s wrong: The program aims to cut monthly mortgage payments to 31 percent of a borrower’s income. There’s no way this borrower can fit the mold. He doesn’t have enough income to have that mortgage anymore. The mother was not happy. She wanted to know who then does the program help.
Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.
Comments
www.naca.com.....we can save your home!
Posted by: Kevin Thomas | August 10, 2009 11:32 AM
Excellent article. Sadly I have a story to add. A retired couple took out a reverse mortgage from Wells Fargo. However, it turned out Wells only brokered the deal, and Indy Mac held the instrument. Six months later, Indy Mac declared bankrupcy, and while the FDIC covered depositors, guess what happened to reverse mortgaga holeders expecting monthly income? - Ann Seymour, author of "I've Always Loved You," a true story of ww2 in the Pacific
Posted by: AnnSeymour1 | August 10, 2009 2:11 PM
Let's discuss each story and see what could have been done to avoid it.
1. Saddest Story. This lady should not have bitten off more than she could chew. She obviously had the financial means to live up to her obligation - but only after the bank threatened to sell the house. Sad as her story is, SHE MADE A COMMITMENT TO THE BANK AND SHE HAD THE MONEY TO SATISFY HER OBLIGATION. She chose not to pay the bank each month.
2. Ruined credit. If you could not even make payments on something you own, why in the world would you make payments on something you don't own? I don't blame this landlord one bit. Why rent to someone that can't manage their household finances?
3. Bailout misunderstanding. If your monthly mortgage is more than 1/3 of your take home pay, you deserved to lose the house. Taking on more than that is completely irresponsible. I understand that the man lost his job, but let's face it, if your monthly income is $1000, you simply cannot afford to be a homeowner in South Florida. Time to find a nice little studio apartment and use the time living there to reflect on the choices made that ultimately put you there.
Posted by: guaaronteed | August 10, 2009 4:23 PM
AnnSeymour1, Life must be pretty good to you. Your an Asshole.
Posted by: lisamarie | August 10, 2009 6:39 PM
The Nanny Government says you are no longer responsible for yourself or your offspring, so go out eat dinner buy an XBox and then blam everyone else for your financial difficulties.
Posted by: OsamaObama | August 10, 2009 8:09 PM
To: guaaronteed
I just hope somehow I get to see you crying when one day you need a little compassion from someone somewhere. People like you are garbage and post way too many comments. Keep your ugliness to yourself and don't forget to go to church on Sunday.
Posted by: Yeah Sure | August 11, 2009 8:28 PM