So, they do poor jobs when giving loans, and now they don't do poor job when repossessing. I wonder if the banks do better job when giving bonuses.

Michael Moore has a 5 point plan out for how Dems can somehow avoid disaster on Nov 2nd. #2 on his list is to indict the banksters.

"Announce that the Justice Department will seek indictments against both those who caused the economic collapse and those who became war profiteers. Call it for what it is: organized crime. Use the RICO statutes. Use the basic laws that make fraud of any kind a crime. Get in the face of those who stole the billions, make them pay for it -- and the people will love you. We want Dirty Harry, not Dirty Dancing."

http://www.huffingtonpost.com/michael-moore/five-ways-the-democrats-c_b_746761.html

Oh Please!

A couple of anomolies regarding bad paperwork. I am pretty sure the vast majority of people that are foreclosed were not paying their mortgage and there will be no REAL victims that lose thier home irreversibly. More sensationalistic media driven headlines while the guilty as charged nod their collective heads up and down and say "uh-hm". The big bad evil boogie man bank that , ahem, was so mean to give you the loan you wanted, now has the audacity to expect payment. How dare they take the collateral that you promised if you failed to pay? As a loan officer of 12 years, i never once had a customer not know the loan they were getting. Even the least savy customer knew when they got to the "Note" at closing would notice whether is said ADJUSTABLE in big bold letters at the top of the page. Its impossible to miss it. Also, in every closing, there is a document called the TRUTH IN LENDING DISCLOSURE document in font that is HUGE. Everyone reads it do to its inherent nature to see what the truth is. It clearly states what your payments will be and for how long. Again, an 8th grader could read it.

Stop blaming banks. In almost every case, the borrower KNEW what they were signing.

Michael Moore's plan to AVOID disaster?

Is AVOID maybe not a typo?

The comment by elweedz (and a similar recent op-ed in the New York Times) suggests that people who entered into unfavorable mortgages are stupid and/or greedy and should pay for their stupidity and/or greed, even if it means the economy collapses. But the truth is that people in general don't understand how mortgages work. My boyfriend (college-educated IT professional) entered into a mortgage that was nowhere near as good as his 800+ credit rating, good salary, and no debts should have gotten him (a 5/1 adjustable with a bad rate and hefty origination fee). I asked him why we did it. Answer: He trusted the broker that it was the best mortgage he could get and was told that he could "always refinance" if he found a better one. This is the reality behind what happens. I'm a lawyer, and I'm trained not to make those kinds of mistakes. But I know lots of people -- friends, family, and clients -- who have. I guess they're all just stupid and/or greedy. Or maybe things are just more complicated than that.

Elweedz you must be smoking on some elweedz. People in your industry had everything to do with this mess. Pages and pages of legaleese just to sell a home. Why have so many documents if there is nothing to hide. A sale contract can be as short as one page, but there would be no way to deceive the buyer. Many people knew what they were doing, but I believe the banks were even more negligent asn foolish. IF YOU LOAN MONEY TO PEOPLE WHO YOU KNEW COULDN'T PAY YOU BACK IT'S ON YOU. SOME OF YOU DIDN'T EVEN ASK. REAL BRIGHT.

This is only delaying the inevitable.

I hate the argument "taxes went up" or "I lost mt job". None of those give anyone the right to not pay for something that are using. Either try to figure out how to afford your house or get out.

I'm not sure how sympathetic neighbors would be if they knew someone a few doors down stopped paying for their house and are living for free. I think 99% of people would have the same thought, "what a freeloader".

This whole situation pisses me off as a buyer because I'm trying to look at foreclosed homes but the evicted owner has a temper tantrum and destroy the house and blames the bank!

I was trying to look at a property today. Only to find keys were snapped off into the locks preventing anyone from viewing the home.

At what point does squatting become trespassing and destroying homes become vandalism???

@DRE @ Michele

You honestly think it's 100% the lenders fault for this? LOL

This had nothing to do with buyers being irresponsible at all? LOL

I really should break this down like the McDonalds argument.

Here's something simple to consider. Nobody forced them to buy a house. IMO blame is 50/50.

Sure, ironhide, no one "forced" buyers to buy a house. However, whenever a buyer mentioned that the house cost too much, or the loan terms weren't as favorable as they'd like, or whatever else, the realtor told them not to worry, the value of the house would go up, and they could refinance, and everything would be fine. So, once again, the people with a fiduciary responsibility to act ethically, did not. It's absolutely the fault of the banks and realtors.

If the buyer is supposed to recognize that they can't afford the loan, then surely the people who make their living at this sort of thing should also recognize it. And they did, but they didn't care, because it was all about getting the commission and moving on to the next one.

Asymmetric information is when one party to a transaction is far more sophisticated than the other and is a type of market failure. It happens in virtually all markets, but the mortgage market, for reasons many have already listed, is especially prone to it. I've seen loan officers tell bold faced, outright lies to borrowers. When you buy a car you expect the salesman will try to sell it for as much as possible, but you don't expect him to chip off the Toyota badging, glue Lexus badging on, and tell you it's a Lexus. Also, when it came to some of the more exotic loan types, most loan officers didn't understand the program so there's no way borrowers had a clue what they were getting into. Certainly borrowers are/were culpable, but the counter-party to these transactions is absolutely culpable.

No one is 100% guilty or innocent, but when comparing the MBA types who designed the entire system to your typical homeowner who might do 3 mortgages in their entire life, the comparative guilt weighs heavier on the MBA market makers.

@stretch

I don't think you can assume that every loan was handled like you just described.

The people who believed these brokers that they could go above their limit must have assumed one or more of the following.

1. They've won some weird raffle where they get free money per month.
2. They will get a check every month for the difference.
3. (More likely) The bank managed to find and kill a leprechaun and give the buyer some of the gold.

Personal accountability

Asymmetrical information has it. The only market worse than the mortgage market is health care. The client is bargaining with their life. Value=infinite. If the value is infinite supply and demand doesn't work. This is freshman economics but somehow noone gets this. MBAs see this as an exploitable market. Shame on the US for preferring MBA hires in the private and public sector for the past 20 years.

Wells Fargo and its army of attorneys knew it is Category C felony to make mortgage loan and foreclose home based on fraudulent appraisal. However they chose to defraud us by foreclosing our home.

Wells Fargo committed prosecutable crime against us. We lost our home. Something is wrong with this picture.

Here are the facts.

1. it is illegal for Wells Fargo to make mortgage loan to us based on hugely inflated appraisal.

Fact: - Wells Fargo's fraudulent appraisal valued our home at $718,000

- Wells Fargo's own review appraisal valued our home at $475,000

- Nevada Attorney General's office suspended the appraiser's license for committing appraisal fraud on our home.

- Nevada Appraiser Licensing Board mandated the appraiser to complete appraisal fraud course before regaining his real estate appraiser license.

- Nevada Revised Statue NRS 205.372 states that it's category C felony to make mortgage loans based on fraudulent appraisal.

- Cases of Attorney General's indictments against attorneys, loan brokers for teaming up make fraudulent loans to defraud homeowners.

2. it is illegal for Wells Fargo to wrongfully foreclose our home based on fraudulent appraisal and mortgage loan.

IMPORTANT FACTS ABOUT FORECLOSURE AND MORTGAGE FRAUD

Foreclosures via deceptive and fraudulent proceedings enables repetitive, and illegal property flipping; it enables lenders to falsify IRS form 1099-A’’s; it enables unscrupulous foreclosure mill lawyers (especially because of judges who purposefully abet deceit) to deceptively hold
auctions and make insider bids to acquire those properties; and blighted neighborhoods. Fraudulent foreclosures ensure the success of FABRICATED BANKRUPTCY COURT ‘Lift Stay motions’ and false ‘Proof of Claims’.

Foreclosure via fraud is the reason for illegitimate homelessness and underhanded evictions, unjustified IRS tax bills due to false 1099-A’s, and unfair “Deficiency Judgments.” Ironically,
some people who express their anger at “deadbeats” appear to be more acceptable about the manifest fraud and criminal activity being carried out by people with credentials to practice law.
Equally ironic is the reality that some people pretending to be annoyed about “deadbeats”are the actual people who are participating in real estate racketeering –fully sanctioned by the majority of courts, especially Bankruptcy Courts!

Michelle, it is no credit to someone to underline his/her educational credits, if that person is unable to evaluate a 30 year contract...one could get doubtful about such education.

Donna-
Did Wells Fargo foreclose becasue the appraiser overvalued teh property or because you stopped making payments that you promised to pay? I thought so.
Regardless of what the appraiser valued your property to be, in your mind, it was worth that amt thus you agreed to take a loan to buy it.

@michelle- you did not disclose the rate or fees or date of origination. A 5/1 arm is a common loan taken by people with good credit. EVERY mortgage holder will tell you their rate is too high no matter what it is. Also, the origination fees are voluntary, as in you have a choice to accept a higher rate for less fees. I suspect that the terms of your loan were probably very reasonable. The vast majority of people shop rates at time of application and have an understanding of what the market will offer them. I am not in the business anymore but, I promise you that almost everyone applying for a loan right now still says the same thing about 3-4%rates, there too high.

@DRE- The industry did not create all of those documents at closing, your gov't and over litigious populace did. Most documents you sign at closing are required by law. Whats wrong with smoking weed? Oh that's right, your goverment has you conned on refer madness right?

Ironhide, if the borrower is supposed to have "personal accountability" when they take out a loan, shouldn't the realtor, appraiser, and mortgage broker have "professional accountability"?

Ultimately, if the borrower is borrowing too much money to make the payment, then the lender also knows that. The borrower can't sign any papers or borrow any money unless the lender offers to lend them the money. Therefore, the real estate industry is at fault. All they have to do is simply refuse to lend to people who can't pay. Then those people don't have to exercise "personal accountability" because the lenders first exercised their "professional accountability", which they didn't do because they didn't want to shut off the money faucet.

I can't help but to wonder how many people had that little voice inside saying 'Don't do it. Something just does not feel right. Don't do it.' I had a good job and an excellent credit rating and I was badgered to buy something/anything in this 'great market' and did not because I kept hearing that little voice saying....

Don't let these armchair quarterbacks get you or your boy Michelle!

It is so easy to call people stupid "AFTER" they bought a house.

No one knew (other than the banks and Wall Street) that the system was rigged. It was a ponzi scheme played on the entire American population. Even if everyone stopped paying into their securitized mortgages, the banks would be bailed out with taxpayer money. They knew they would crash the system going in, and they knew they were too big to fail.

That is what your boyfriend, me, and millions more of "INDIVIDUALS" were against...Greed and fraud on a massive scale.

So yeah, I am educated too, but most people are not educated in contract law and all the working parts of how mortgages work...Most people still don't know who owns their mortgage!

The stupid people are the ones holding on to a house hoping that the market will change or correct in their favor...Didn't they hear? In Vegas, and on Wall Street, the house always wins!

Michael Moore,now there's an individual with real credibility, next you'll be suggesting Barney Frank as a credible champion,for reputable loan practices. Speaking of Frank,will there ever be a credible investigation into Frank,and Dodd's involvement into the Fanny Mae shannigans?

http://news.yahoo.com/s/nm/20101012/bs_nm/us_usa_foreclosures_4

It keeps getting juicier!