Not so fast! There was a pretty high degree of fraud at all levels by all sorts of “Professionals”. I think at least some of the borderline, barely literate, immigrants may be excused for believing that they are dealing in a “developed” country (unlike their native kleptocracies) with good consumer protection laws and some degree of honor and integrity among the white collar “professionals”. That the “developed country” that they came for better life is also a kleptocracy is hitting them like a ton of bricks.

Obviously I have no sympathies for fraudulent buyers, but no sense in hating those who are victims of fraud.

I got really puzzled with their second story. (The one about a couple that bought a 2-story house for $445k in National City in 2002) 445k sounded insanely high for 2002 in National City. Besides, if they bought in 445k, why couldn’t they sell or refinance? The house should be worth at least 600k now.

So I did some digging and I found this:

1018 D Ave, National City, CA 91950
3 beds, 1.0 baths, 1,395 sq ft
Built in 1935

In 2002, it was worth 200-250k. But it wasn’t bought in 2002. It was bought in September 2004. Right now it is supposedly worth around 450k. The house is listed on Yahoo Real Estate as a REO with asking price 351k.

So here’s what the story looks like. An elderly couple saves some money by “many years, sacrificing, working two and three jobs” and buys a 70-year-old 3br shack in a poor neighborhood for close to half a million dollars. With no money down. Judging by the monthly payment ($2045/month), financing is either 5.5% interest-only or ARM with “teaser” rate of around 3.7%. The former is more likely (or else how do you explain their shock about the rate increase?)

Soon it turns out that they can’t afford to pay even that. At this point their house is about $100k up in price. Do they sell it? No, instead there comes an absolutely incredible refinance story from which they emerge holding an ARM, with full realization that they won’t be able to pay once it resets. ARM resets, they go into default without even an attempt to sell the house.

I’d call it extreme financial cluelessness, but we’re told that the lady owns two restaurants? This is beyond bizarre, this is Twilight Zone material.

esmith,

I agree, the stories cited here are somewhat bizarre examples in my opinion. I only did a cursory review of the whole thing, but there was something odd about the second story on Inez as well. In the article it states that she managed save $150K and yet was struggling with the payment. Saving that much money is extremely difficult unless the HHI is high enough to actually make the payments they were supposedly struggling with. Sounds like lazy reporting to me.

I picked up the Reader yesterday and read the article. Gotta love this quote from an outraged housing advocate:

Price is fed up with the newspaper analysis and number crunching he reads: “What about the people? Everybody’s concerned about a number, a product, a portion of their inventory. Where are these people, turned out of their condos, going? And what about the people who haven’t yet lost their homes but are crazy as batshit trying to keep it? Husbands and wives aren’t talking.”

Unprompted, he continues. “This is a shame-based crisis. So many homes could have been saved if the husbands and wives could’ve talked about it. But they tore up the [overdue notice] when it came. They didn’t return the phone call from the mortgage company. Because they’re ashamed — because now they’ve got an Escalade sitting in the driveway. It’s really hard to get the story from people because of the shame. They got caught up in chasing the American dream because it finally became available to them. By hook or crook, however it became available, it became available. They took advantage of it.”

LOL.

“man fuck those immigrants who got screwed, my tax dollars spend too much to give them there benifits,now i have to give them a bailout too.fuck you.

america wake up !!!!! a Depression is coming for you.”

Yeah, I’m sick of hearing about all this bailout crap too. One thing this article doesn’t mention is whether these supposed “victims” committed fraud on their mortgage applications.

As far as I’m concerned, the borrowers, the mortgage brokers, the lenders, and the buyers of the MBSs/CDOs/etc. can all burn in hell. None of them deserve saving as they were all complicit.

If you cannot do the math…you have no business buying a $400K home. I am not going to feel sorry for them, any more than I would expect someone to coddle me if I went to France and did something stupid.

It seems to me the immigrants can do math well enough to figure out how to maximize their “benefits” when they come into the US. Perhaps if they realized they need to read their contract….MAYBE it would have prevented their so-called “victimization.” The last thing we need is immigrants who can’t function with financial sense. We already have plenty of born-Americans with that problem.

SDR: Where will he go if the bank forecloses?

Mario: "I don't know. Maybe the mission."

Mario has a job. Couldn't he just rent a place? Or, does having to live at the "Mission" sound more devastating and tug at the heartstrings a little more than the more realistic scenario of renting?

As for Inez, I don't think I can recall such a horrifying victimization! Imagine the bank forcing her into their branch office to refi, pull out cash from her home and spend it. Not only did she spend her equity gain but her original equity from the down payment as well. Of course, according to the author, that was just to pay the bills.

Inez "needed money for bills"?? What bills? The electricity bill? Water bill? Or perhaps the bill for the new Escalade? Plasma TV? Credit card financed cruise? Etc.

Typical biased journalism. Too much of it these days. I especially like this line…

"Inez FOUND that as her equity increased she could refinance her loan and get cash" (to pay bills of course).

He could just as easily have written:

"Inez CHOSE to refinance her home and pull equity out in order to engage in a lifestyle over and above what her ordinary income would allow"

Here's another I like:

"Inez was ASTOUNDED to discover that each time she read the new loan documents, World Savings was not accurately listing her income."

Astounded? Apparently not "astounded" enough that after seeing it multiple times she made them change it. Of course, then she wouldn't be able to get more cash (to pay bills of course).