Judge Nullifies Mortgage, Gives House to Couple Who Have no Equity

[Doofrat]

The original bank made a bad decision loaning to a guy who sells collectible dolls online, but the judge made it worse:

http://www.nypost.com/p/news/local/judge_kos_mortgage_to_slap_bank_28ZS1oW8Y58z6gu1AQbWMI

[ucodegen]

This ruling had me floored. A quick summary:

[ucodegen]

This ruling had me floored. A quick summary:

Two income household, one is a professor of English and Cognitive Reason, other sells dolls online (which can actually be quite lucrative, depending upon what kind).

1994 – Original house, 3400sqft bought for less than $200,000.

2004 – refinanced into sub-prime for $292,500 – initial interest 10.375 (peaked at 12.375)

2005 – started having trouble making payments, claimed because of health problems (his – the dollmakers, his wife is the professor)

Why did they refi in 2004 into a higher interest rate? This does not make sense. They were ‘set’ until then. There was a claim that it was for health care and his business. I suspect it wasn’t health care as much as equity out for his business.. His wife is a professor and most college prof’s health care covers both partners.

Effectively the guy ends up doing an equity out, ‘gambles’ around $90,000 in a ‘business’, whines to the judge and gets it all erased.. even the principal he owed on the house. I do think that the $235,000 in interest and penalties over 5 years might be excessive.. though 10.375% applied over 5 years yields $186,658 if they had stopped any mortgage payments and with no increase in interest during those 5 years (amount that would pile up if they decided to try to live ‘rent free’ by not paying the mortgage).

[ucodegen]

This ruling had me floored. A quick summary:

Two income household, one is a professor of English and Cognitive Reason, other sells dolls online (which can actually be quite lucrative, depending upon what kind).

1994 – Original house, 3400sqft bought for less than $200,000.

2004 – refinanced into sub-prime for $292,500 – initial interest 10.375 (peaked at 12.375)

2005 – started having trouble making payments, claimed because of health problems (his – the dollmakers, his wife is the professor)

Why did they refi in 2004 into a higher interest rate? This does not make sense. They were ‘set’ until then. There was a claim that it was for health care and his business. I suspect it wasn’t health care as much as equity out for his business.. His wife is a professor and most college prof’s health care covers both partners.

Effectively the guy ends up doing an equity out, ‘gambles’ around $90,000 in a ‘business’, whines to the judge and gets it all erased.. even the principal he owed on the house. I do think that the $235,000 in interest and penalties over 5 years might be excessive.. though 10.375% applied over 5 years yields $186,658 if they had stopped any mortgage payments and with no increase in interest during those 5 years (amount that would pile up if they decided to try to live ‘rent free’ by not paying the mortgage).

[ucodegen]

This ruling had me floored. A quick summary:

Two income household, one is a professor of English and Cognitive Reason, other sells dolls online (which can actually be quite lucrative, depending upon what kind).

1994 – Original house, 3400sqft bought for less than $200,000.

2004 – refinanced into sub-prime for $292,500 – initial interest 10.375 (peaked at 12.375)

2005 – started having trouble making payments, claimed because of health problems (his – the dollmakers, his wife is the professor)

Why did they refi in 2004 into a higher interest rate? This does not make sense. They were ‘set’ until then. There was a claim that it was for health care and his business. I suspect it wasn’t health care as much as equity out for his business.. His wife is a professor and most college prof’s health care covers both partners.

Effectively the guy ends up doing an equity out, ‘gambles’ around $90,000 in a ‘business’, whines to the judge and gets it all erased.. even the principal he owed on the house. I do think that the $235,000 in interest and penalties over 5 years might be excessive.. though 10.375% applied over 5 years yields $186,658 if they had stopped any mortgage payments and with no increase in interest during those 5 years (amount that would pile up if they decided to try to live ‘rent free’ by not paying the mortgage).

[ucodegen]

This ruling had me floored. A quick summary:

Two income household, one is a professor of English and Cognitive Reason, other sells dolls online (which can actually be quite lucrative, depending upon what kind).

1994 – Original house, 3400sqft bought for less than $200,000.

2004 – refinanced into sub-prime for $292,500 – initial interest 10.375 (peaked at 12.375)

2005 – started having trouble making payments, claimed because of health problems (his – the dollmakers, his wife is the professor)

Why did they refi in 2004 into a higher interest rate? This does not make sense. They were ‘set’ until then. There was a claim that it was for health care and his business. I suspect it wasn’t health care as much as equity out for his business.. His wife is a professor and most college prof’s health care covers both partners.

Effectively the guy ends up doing an equity out, ‘gambles’ around $90,000 in a ‘business’, whines to the judge and gets it all erased.. even the principal he owed on the house. I do think that the $235,000 in interest and penalties over 5 years might be excessive.. though 10.375% applied over 5 years yields $186,658 if they had stopped any mortgage payments and with no increase in interest during those 5 years (amount that would pile up if they decided to try to live ‘rent free’ by not paying the mortgage).

[jpinpb]

I have seen much greater equity taken out. This was pocket change. But apparently the judge is making an example here. The bank had $814.2 million federal bailout and is involved in a similar case in California, where it’s trying to foreclose on an 89-year-old woman, despite two court orders telling it to stop. Pretty ruthless. Yet at the same time, banks here are letting people live up to a year and not even file a NOD. Go figure.

[jpinpb]

I have seen much greater equity taken out. This was pocket change. But apparently the judge is making an example here. The bank had $814.2 million federal bailout and is involved in a similar case in California, where it’s trying to foreclose on an 89-year-old woman, despite two court orders telling it to stop. Pretty ruthless. Yet at the same time, banks here are letting people live up to a year and not even file a NOD. Go figure.

[jpinpb]

I have seen much greater equity taken out. This was pocket change. But apparently the judge is making an example here. The bank had $814.2 million federal bailout and is involved in a similar case in California, where it’s trying to foreclose on an 89-year-old woman, despite two court orders telling it to stop. Pretty ruthless. Yet at the same time, banks here are letting people live up to a year and not even file a NOD. Go figure.

[jpinpb]

I have seen much greater equity taken out. This was pocket change. But apparently the judge is making an example here. The bank had $814.2 million federal bailout and is involved in a similar case in California, where it’s trying to foreclose on an 89-year-old woman, despite two court orders telling it to stop. Pretty ruthless. Yet at the same time, banks here are letting people live up to a year and not even file a NOD. Go figure.

[jpinpb]

I have seen much greater equity taken out. This was pocket change. But apparently the judge is making an example here. The bank had $814.2 million federal bailout and is involved in a similar case in California, where it’s trying to foreclose on an 89-year-old woman, despite two court orders telling it to stop. Pretty ruthless. Yet at the same time, banks here are letting people live up to a year and not even file a NOD. Go figure.

[capeman]

If the courts keep nullifying contract law like this we may no longer have a mortgage system since no one with half a brain would lend in that environment. That scenario would take an insane chunk out of housing prices! Cash only?

[capeman]

If the courts keep nullifying contract law like this we may no longer have a mortgage system since no one with half a brain would lend in that environment. That scenario would take an insane chunk out of housing prices! Cash only?

[capeman]

If the courts keep nullifying contract law like this we may no longer have a mortgage system since no one with half a brain would lend in that environment. That scenario would take an insane chunk out of housing prices! Cash only?

[capeman]

If the courts keep nullifying contract law like this we may no longer have a mortgage system since no one with half a brain would lend in that environment. That scenario would take an insane chunk out of housing prices! Cash only?

[Author]

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