posted on Jul, 2 2008 @ 12:37 PM
Even if the new ruling is pushed through it will only impact borrowers who can prove beyond a shadow of a doubt that fraud was in fact commited...I.E.
false documentation being submitted, section 32 violations etc.
This will not apply to people who simply feel they "got a bum deal" This is why your final closing packet on a mortgage loan is 200+ pages of
compliance agreements ad nauseum, all signed by the borrower before the loan transaction is funded. Anyone who is truly a victim of a crime deserves
to be heard, obviously. And many lenders have already been re-negotiating terms with borrowers who are facing foreclosure, even before this law would
What people do not understand is the last thing a bank or a lender wants is to foreclose on a note, because they end up losing a ton of money on each
loan if they do. They only make money by seeing the loan fully amortize, thus collecting on the interest.
What strikes me as border line hilarious is the claim that these people in the news snippet are trying to state that they believed their loan would be
fixed at 1.75% for five years. There is no loan product in existence that would hold an introductory rate that low for five years. Sounds suspect IMO.
The only type of loan that could even possibly carry a rate that low would have been some sort of pay option ARM or possibly an interest only product.
In either case the terms would be laid out clearly showing the schedule of adjustment, and the borrower would have had ample opportunity to review
that documentation and even have it explained over and over again.
It is impossible for a loan officer to cheat a borrower so severely because, once again, you are shown all of this in plain black and white print not
only on your TIL, but in your RESPA packet as well as the GFE, and then again on the final paperwork at closing. If someone didn't review their loan
dynamics properly then I find it difficult to blame anyone but the borrower. Read the fine print people, you are signing in most cases a 30 year
commitment. Perform due dilligence on your own behalf, do not rely on someone else to do it for you.
The only way these people could have been tricked or cheated is if the loan terms were changed AFTER they signed, which is almost next to impossible
without commiting wire and lending fraud, which in either case, yes they deserve to be compensated and the bank rep will likely face jail time.
Please understand that I am not directing any hostility toward people who genuinely are victims of mortgage fraud, but for anyone who wants a new deal
simply because they don't feel like honoring the agreements that they have signed and agreed upon, I find it difficult to show sympathy.