Has this ever happened in American history? That someone who was paying their mortgage was evicted because the bank had a sweetheart deal with someone? That's not how I understand mortgages to work.
I know it isn't the point of the article, but I can't understand people getting upset at a bank for foreclosing a house. Pay your mortgage and they are unlikely to foreclose.
What does a lender do when you can't pay a mortgage? They come and repossess your house. That is the situation he is in now. He realized that at the last minute when he tried to bail but gosh darn those pesky laws and contracts:)
The thing I'm most confused about the whole article is how did some homeowners go years (a decade?) living in their home without paying a mortgage and not get evicted? The article implies this is happening but I didn't realize any lender allowed that amount of time to pass.
I'm well aware of all the stories of people getting screwed over by banks while trying to renegotiate their mortgages, and I'm also well versed in foreclosures, since a few people that I've known have gone through this process via strategic defaults. I would hazard a guess that I know more about this process than you do.
But I still don't believe that the reaction of the landlord makes sense to me, unless the author was missing some key facts.
The article says that not only was he renting the house for several years, but the landlord also raised his family in it. So, depending on how long the landlord owned it, there must be considerable equity built up in the house. To let something like this slip away without fighting it would be ridiculous. If the account of the author is accurate, then it sounds like the landlord walked away from the place. It just doesn't make sense that he would be apologetic to the renters, but instead he should be steaming mad, and would be trying to protect his investment. If this were me, and I just lost a house that I put a few 100k into it, and I had good renters, I would tell my renters "Don't move anywhere, I'll handle everything." But it sounds like he hung he renters out to dry.
Remember, in order to get a loan mod (which the landlord claims he was in the midst of), the landlord at some point must have stopped paying his mortgage, so he definitely was collecting rent without paying the mortgage. Landlords letting their rental units slip into foreclosure, which collecting rent is even more common than banks screwing up and accidentally foreclosing on homes, so to me this is the more likely scenario.
Alright, I didn't know that. It does sound like a bad deal. Imagine if a bank suddenly changed the terms of your mortgage and repossessed the house. You're literally borrowing money from them after all.
I didn’t see any reports of banks in the US showing up to people’s doors, coming into their house and removing their stuff. Everything around the loan and foreclosure may have been shady, but the actual eviction is usually above board by the banks.
We were renting a house, and the land lord was playing games with mortgage. We kept getting notifications, It was insanely stressful.
One day the sheriff and bank came to “evict us” they were shocked to find the house was being rented out. Since we had lease, they couldn’t evict us. But still.
We ended up moving out a couple weeks later anyway. Bank paid us a good amount to leave. We were happy to get away from it all.
> people were foreclosed on when they should not have been
That's not what happened here, though; the homeowner managed to avoid foreclosure despite not servicing the mortgage, precisely because the banks messed up the paperwork.
There are victims in the overall saga: people who were missold mortgages that they were never going to be able to service, at rates higher than they were entitled to, who lost their savings as a result. But they don't feature in this story.
And banks have never foreclosed on mortgages unfairly, right? He made it easy for the bank to cash out at a huge loss to the mortgage holder. If it wasn't easy then the bank would have been more motivated to reach some agreement with the mortgage holder.
The part I found strange was the mortgage they're paying on a new place, meaning they purchased another home. If the family was struggling financially, how could they have qualified for a loan to purchase another place so soon after having their previous home foreclosed?
Yes, they did the bank a huge favour. But likely they didn't have a choice, ~75% of mortgages are non-transferable, and they cannot hold the mortgage without the collateral of the house.
But if they were part of the ~25% of mortgage holders with transferable or assignable mortgages they had other options.
But if the owner didn't pay, the mortgage company - and by extension, whoever got the rights to that debt - can foreclose on the house and sell it, no? I assume whatever company know owns that mortgage wants to recover their losses by selling it ASAP.
That is insane. Why are working people paying someone's mortgage? The personal situation this woman finds herself in sounds dire and my sympathies go out to her.
However from a financial point of view this is simply the state preventing mortgages from ever failing. Banks are protected by our taxes.
That article isn't the same. They stopped paying their mortgage because that was a requirement for the TARP loan modification program. They didn't get the modification and as a double whammy fell even further behind on payments.
My issue is with banks, landlords, and utilities where you send payment and they act like you didn't. Then threaten you with all types of legalese. This happens all the time for long term, rent-controlled, and rent-stabilised tenants. The landlord is trying to find any reason to throw you out. I've spoken with housing advocates and legal aid on this. If the owner starts acting up, i.e. not cashing checks while simultaneously sending you eviction notices, document everything. Spend the extra dollars to send a certified letter and keep the receipts.
Did you read the article? The premise wasn't, these banks aren't fair or that there's anything necessarily wrong with banks selling mortgages. The premise is that banks have created a system that erodes one of the foundations of our system, the proof of ownership.
If you're fine with someone using the technicalities of the contract to strategically default then you should equally be fine with someone using the weird system of title transfers that the banks use to their benefit in one's own favor.
There are stories about people who stopped paying their mortgage and got away with it because the mortgage had been resold several times and there wasn't clear paperwork about who owned it. But these may be urban legends.
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