Archive for the ‘homelessness’ Category

DISHONEST, IMMORAL MORTGAGE LENDERS

November 6, 2008

HOME OWNERS FLEECED BY DEVIOUS BANKS

 

“An important factor behind the increase in mortgage foreclosures is the rise of so-called subprime loans. Subprime loans are made to borrowers with credit deemed insufficient to qualify for a standard home mortgage. They sometimes entail predatory practices including exorbitant interest rates, additional fees and prepayment penalties that make it virtually impossible for the borrower to escape from debt. Subprime lending is targeted disproportionately at the poor, minorities and the elderly.

The increase in home foreclosures is linked to the rise in subprime lending. Studies in Boston and Atlanta conducted during the 1990s showed foreclosures by subprime lenders tripling, while foreclosures by other lenders remained steady or declined. A similar study in Chicago, which began at an earlier date, showed an even more dramatic increase. [ See Subprime Foreclosures: the Smoking Gun of Predatory Lending? Policy Development and Research Information Service http://www.huduser.org/index.html%5D

During the 1990s the practice of “risk based’ pricing increased. Banks began charging higher than normal interest rates to certain borrowers deemed to have lower than average credit worthiness. This practice was justified on the grounds that it opened home ownership to those who would not otherwise qualify for mortgages. However, by their nature, subprime loans carry a higher risk of default because they impose an additional financial burden on those who are in many cases least able to afford it. Further, subprime loans have become an arena for outright fraud and abuse. Cases of “redlining” have been documented where whole neighborhoods, usually poor or minority, are deemed to be substandard credit risks, forcing residents with otherwise excellent credit to pay subprime interest rates.

One of the most flagrant offenders is CitiGroup, headed by Bill Clinton’s former treasury secretary Robert Rubin. In March the Federal Trade Commission charged CitiGroup with deliberately “steering” and “misleading” borrowers into accepting predatory loans.

It is alleged that CitiGroup, its affiliate Associates First Capital and sister company CitiFinancial engaged in predatory lending practices such as inducing borrowers to take out high-interest loans even though they qualified for prime-rate loans. It is also charged that CitiGroup engaged in another predatory tactic known as “flipping,” where borrowers are pushed into progressively higher-interest loans by repeatedly refinancing their mortgages. The bank is also alleged to charge “excessive and unjustified” fees and impose impossible loan terms that lead to foreclosure.

Despite these serious allegations of a criminal character, CitiGroup and its executives were able to escape any major consequences by paying a mere $215 million in restitution to defrauded home buyers.

Such practices are by no means the exception. Subprime lenders often impose interest rates far higher than anything that could conceivably be justified by factoring in costs associated with added risk. Borrowers are often unaware of provisions hidden in fine print that require additional fees, balloon payments or the payment of compulsory life insurance premiums. In some cases lenders simply lie to borrowers, stating installment amounts that are far lower than what the mortgage holder is actually required to pay.

There are indications that the speed of home foreclosures is increasing. This is also tied to the rise of subprime lenders. For example, the above mentioned study in Washington state noted that of all foreclosures reported in 2000, subprime lenders were responsible for 58 percent of fast foreclosures, defined as foreclosures within the first two years.

Powerful financial interests have intervened to block even token reform. For example, the Ohio legislature enacted a bill in February 2002 prohibiting local communities from passing laws against predatory lending”.

MONSTROUS SOCIAL INEQUALITY

“Our site provides a source of political perspective to those troubled by the monstrous level of social inequality, which has produced an ever-widening chasm between the wealthy few and the mass of the world’s people.

As great events, from financial crises to eruptions of militarism and war, break up the present state of class relations, the site will provide a political orientation for the growing ranks of working people thrown into struggle.

We anticipate enormous battles in every country against unemployment, low wages, austerity policies and violations of democratic rights.

The financial crisis enveloping the entire world economy sharply poses the need for the international unification of working people. Transnational production and global financial markets have changed the face of capitalism forever.”

( This is from an interesting political website and I just couldn’t resist quoting the article as I couldn’t have put it better myself)

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MORTGAGE LENDERS DESTROYING OUR LIVES

May 14, 2008

My nine year old son and I are currently going through the repossession process yet again. We will shortly be homeless this time.

 

My son’s Mother became ill when he was a baby and was unable to look after him or even be with us. The building society were about as obstructively unhelpful as you could imagine and insisted on re-possession even though I had another mortgage already arranged to repay them with. Their legal executive was actually abusive just prior to the court hearing, spitting venomously ‘ We will get you thrown out of your house at this hearing regardless of what you say’.

 

In fact the court stayed repossession as the new mortgage was going to be in place within a day or two. But nothwithstanding that, the building society had completely ignored that and were obviously expecting the court to do so as well. They were simply intent on maximising aggression. It was appalling !

 

That was my first repossession experience in about 1999.

 

The second was last year. It is a long story, but the essence of it was I was completely misled by the building society when I had told them I was trying to struggle back into work as a single parent and somehow manage to look after my son as well.

 

The building society told me not to worry about paying the mortgage for the time being (half was being paid by the state anyway as I was an unemployed single parent) and then they immediately sent penalty charge notices and began the re-possession process, ignoring the fact they had said I did not have to worry about the mortgage for the time being.

 

Again, their behaviour was outstandingly aggressive and obstructive and there was absolutely no consideration of my  (extreme) circumstances whatsoever. They forced me to cancel vital, life saving surgery I was scheduled for and then, later, when recovering from surgery, they forced me to physically appear in court in a state of virtual collapse from what had been very recent (still in recovery period ) major surgery.

 

I was precisely seven minutes late for the hearing (the recent major abdominal surgery had made it almost impossible to walk)  and it (along with several other cases) had already been dealt with, repossession being granted by the court for several other people’s properties in separate cases, all within that seven minutes.

 

I managed to reverse that weeks later and was subsequently given a six month stay by the court, provided I cashed in a pension to extract cash to pay off the arrears  of only about £3000 to date.

 

When the pension company took  a long time to process their documentation, I asked the court for an extension of the 28 days they had given me to come up with the money. The court said, not to worry, no need to make that application as we will be seeing you at the end of the first three months anyway for a ‘review’.

 

At this three month review the judge said I had broken the court order giving me 28 days to pay the arrears and although he acknowledged that  it had not been my fault, it being entirely the fault of the slow processing by the pension company, he was ordering repossession then and there and not giving the remaining three months of the six month period granted me. I had, in fact already paid off the arrears by this point. This was an abuse of process by the court, and quite wrong.

 

So there was a repossession order granted when the arrears had been completely paid off and no arrears were actually outstanding at that point. That judge also sanctimoniously told me that he was of the opinion it was not possible to earn a living as a freelance public relations consultant or journalist (both of which I have spent my entire life doing) and he would therefore be obliged to order repossession as he could see no prospect of the mortgage being paid by virtue of me earning a living. This despite me showing a document offering me work.

 

How wacky is that. The judge had every legal excuse he might need to be lenient and helpful towards me, but instead he acted out the unbelievable aggression of the lender. 

 

I was finally sent an eviction notice giving me two weeks to vacate the property or the bailiffs would attend and throw me out at the end of that two week period.

 

I still had about £100 000 thousand equity in the house and the annual arrears would only be £6000. So the building society could have waited almost indefinitely for me to sort myself out without any risk to them getting all their mortgage repaid.

 

Meanwhile I had found another mortgage. I was a ‘sub-prime’ customer, which means that regular building societies can pretend they cannot lend to you as you are deemed ‘high risk’. 

 

But, lo and behold, a lender which just happens to be a subsidiary owned by the same ordinary high street lender is willing to lend you a mortgage  incurring vast expense in the manner of ‘financial churning’ and terms on the new mortgage which almost guarantee you will be repossessed again and lose tens of thousand of pounds in penalty fees and possibly all the remaining equity in the house as it is like to be auctioned off for less than market value.

 

In the process of obtaining these mortgages I have experienced blatant deviousness from brokers. The most obvious being they knew perfectly well I was on state benefits and without a proper income and yet they advised which figure to pretend was my income etc and they knew the contents of the mortgage application were a fiction as I had no choice but to follow their blatantly dishonest instruction in order to obtain a mortgage. 

 

They had frequently made it plain that they arranged many falsified applications from desperate people like myself. They also always made false representation to me  that I was eligible for  a particular mortgage they would ‘definitely’ be able to get me at what was quoted as a reasonable rate of interest and then the interest always, without fail in every case, mysterious went up as they changed all the goal posts once I was completely ensnared in their clutches.

 

Of course, I would not have been desperate if the original mortgage company had been reasonable, and they could easily be so as I had  a couple of hundred thousand pounds in equity at the beginning of this process. 

 

The bottom line is that all this is a process which magicks all that equity away from me and into the hands of the mortgage lenders.

 

They are entirely dishonest.

 

If the original lender in 1999 had shown leniency owing to the extreme circumstances of my being a left a single parent after my partner became massively ill, I might now have increased that original mortgage by about £36 000 up to £136 000 from £100 000. But that house is currently worth about £900 000, which would leave me equity of over three quarters of a million pounds.

 

However, my current equity is actually about £60 000, making my total loss of nearly seven hundred thousand pounds, all of which has passed into the hands of various lenders by means of this process they have all connived at agreeing to organise between themselves.

 

My nine year old son and I now face eviction and homelessness. I will lose all that remaining £60 000 of equity, leaving me penniless after being effectively conned out out of my £900 000 house over a period of time.

 

After thirty five  years of owning my own house I am now unlikely to be able to ever buy another house because of the various strictures lenders impose.

 

I have twice recently seen the Council of Mortgage Lenders tell the media their members bend over backwards to help people in difficulties pay their mortgage and it is rare for people to be evicted if they contact their lender early and enter into negotiations.

 

This is a complete fiction (or more properly a lie), verified by my experience. All the lenders have a standard procedural framework for repossessing after just a few months of arrears and it can only be avoided if you come up with the money within that time frame and no longer.

 

Struggling Single Dad