Yesterday, there was an article in the Staten Island Advance www.silive.com, that discussed a recent ruling which homeowners prevailed in staving off the foreclosure. The article went on to mention that the homeowners could not make it the first year before falling behind. While they would of qualified for a traditional home loan (presumably FHA) they instead were "improperly pushed" in to a high interest subprime loan.
The judge ruled that the homeowner could be entitled to reimbursement for fees, payments and the mortgage my be unenforceable. Unenforceable?
This is not to say that there were not some mortgage brokers who were "pushing" certain products, but in fairness there were plenty of homeowners "pushing" for those same products. If they fell behind in year 1 - wouldn't that be before the first reset anyway? And they did agree to borrow money - shouldn't they have to pay that back, like 97% of other homeowners are doing on a monthly basis?
It's not that I don't feel for these people, and others like them. I do. In some cases, and this may be one, they were doing business with people more interested in their bottomline than their relationship. But there have been many instances in which homeowners made decisions, that in hindsight, were incorrect or miscalculated. Simply saying that homeowners are relieved of their obligation could have significant after effects and make it more difficult for millions of others to own their own home. I'm sure that's not what we want to see happen.
Buyers make sure you review what you are signing. You will have a payment in there, if you can't pay it, then say something. And don't sign. Don't worry about your down payment. It will be easier to litigate that, then trying to fight the foreclosure.