"This Loan Is An Example Of What Went Wrong In America"

[Gold Metal Flake]

In 2006, it turned out, she'd unwittingly gotten herself into an adjustable-rate mortgage with a two-year teaser rate. As a result, in December, the interest rate shot up from 7.5 percent to just over 10.1 percent, and the monthly payment on her $280,000 loan went from $1,800 to more than $2,300. She and her husband didn't know how they were going to pay it.

Naill, 50, thought she'd refinanced into a fixed-rate mortgage. Back in 2006, that's what she'd told the broker she wanted. But she signed the documents that were put in front of her, and what she got was a case study in irresponsible lending -- a debt trap that even the broker has admitted was based on a fraudulent application.

Naill works at a Wal-Mart distribution center. Her husband, Donald Naill, is a roofing contractor. "They knowed me and my husband were illiterate, that we had a hard time reading and understanding what we read," Naill told the Huffington Post. "We told 'em straight up they'd have to read it to us, and they said that they would."

In a September deposition for a lawsuit filed on behalf of Donald Naill, the Naill's broker said she knew the loan application contained bogus information -- an inflated income statement that qualified them for a loan virtually guaranteed to blow up in Virginia Naill's face when the interest rate adjusted.


Read more at: http://www.huffingtonpost.com/2009/11/04/this-loan-is-a...

[NYC_SKP]

1. Rec. And thank you for posting the pertinent part so that I don't have to go to HuffPost to read it

It's a sad story, and I can't believe that people don't have legal recourse.

[phantom power]

2. "We told 'em straight up they'd have to read it to us"

This couple was doomed before they ever started.

[Gold Metal Flake]

6. Used to be you had a good chance that you could trust your local banker.

All of their advertising said so. They were the money guys. Come in and we will help you. Like the Allstate "good hands".

Then, the bankers turned cannibal. People who needed help with financial decisions were nothing more than fish to a bear.

And we are supposed to blame the people.

These people need the help of Liberal Democratic representation and legislation. They are why we need Dr. Dean's 50 state strategy still and forever.

[Horse with no Name]

3. I know a lot of people were suckered into this American dream

I never bought into it.
I have a calculator.
I know that I make "X" amount each month. Out of that "X", utilities, food, incidentals come out. That leaves me with a set amount of money for the month. No amount of crazy math or fixed rates or teaser rates change that. It is what it is.
When the dust settled, I STILL could not afford the house of my dreams and there wasn't a magic wand to change that fact.
I have 4 cousins that reaped that whirlwind. While I sit in my fixer-upper, paying the same amount I paid before this fiasco, they lost everything they had and now are even having a hard time renting.
Too many folks weren't willing to be honest with themselves and the hucksters made it easy to prove WC Fields correct.

[la_chupa]

4. I've seen it in person

There is a woman who works with me who is in this same boat. Her husband it out of work and she's a temp. They're facing a balloon payment with no clue what they're going to do. I feel badly for them. I'm sure that when they took this loan out they thought they would be in a better financial position by now.

then they had a kid

so that's helped

[XemaSab]

5. In a just world

professionals would NEVER make a buck off of someone else's ignorance.

[sixmile]

7. Except teachers!

eom

[TroglodyteScholar]

20. +1

[Gold Metal Flake]

8. Or those that would do so would be caught as the docs were reviewed by a manager.

Small, local, boring banks with boring bankers inside serving the local populace and making a reasonable profit while helping the community to grow.

I seem to recall that America from my youth in the 1960s and 1970s.

[rd_kent]

9. Very sad story. They were taken advantage of, BUT they should have known better.....

Here is some data I found in about 10 seconds.


http://www.city-data.com/housing/houses-Mineral-Virgini...



Now, knowing that they cannot read or write, they WERE taken advantage of by the lender. OTOH, I do have difficulty feeling sympathy for folks that do not have the basic life skills, when those skills are available to everyone. Average rent in that town was less than $800 and they had a loan for $1800/month. They fell victim to the lure of easy money and credit, like many others.



As I stated, they DID get taken advantage of and I feel sorry for them, but where is the personal responsibility?




Flame away......

[Raineyb]

10. Well they did tell the bank they were interested in a fixed rate loan.

The bank knowing the couple were illiterate put in terms for an adjustable rate loan. And this is the borrower's fault?

Where's the bank's responsibility?

[rd_kent]

18. The bank has most, if not all the responsibility.

I thought I had made that clear in my post. Sorry if I did not.

[sudopod]

13. OH really?

Oh fucking really?

"I do have difficulty feeling sympathy for folks that do not have the basic life skills, when those skills are available to everyone."

Give me a ticket to whatever world you live on, because I want out of this shithole.

[rd_kent]

19. Last time I checked.....

even the WORST public school was free and had a curriculum. Thats all I was implying.

[sudopod]

27. And what if they are old

and there was no proper school back when they were young? Fifty years ago that wasn't uncommon back where I come from. What if they grew up in a bad neighborhood with a terrible school? What if they had to work and support a family? Life isn't so black and white as you believe it to be.

Neither of my grandparents were able to attend school past the 6th grade due to life happening, and it shows when they write anything. Plus, it is damn tough to acquire reading skills past childhood. It's also hard to understand all the fine print in a mortgage agreement even with a college degree, so anyone in their situation is totally at the mercy of the loan agent. In this case, they weren't being greedy, the loan agent flat out lied

Maybe you didn't mean what you said, but little pisses me off more than people justifying a lack of sympathy. Many of the worst cruelties people inflict on each other are justified by similar sentiments. (That's basically the whole point of Ayn Rand.)

For example: I have no sympathy for poor people with no insurance. They're just lazy. America is the land of opportunity, after all. I have no sympathy for gay people, they know what's in the bible. And so on and so on.

That's why you should have sympathy.

[rd_kent]

31. OK, you are right....I could not possibly have a point

and go right ahead and read past the part where I state that they WERE taken advantage of.

[sudopod]

32. Did that cancel out the "no sympathy" part? :p

Words mean things, you know. If you didn't mean it that way, fine, but that's what you said.

You oughtn't feel overly offended when people react to what you wrote rather than what you meant.

[rd_kent]

35. Try again....

Instead of getting all poutraged at my opinion, I suggest rereading my post. I never stated I had "no sympathy".

I don't feel offended when people react to what I wrote, but I do get offended when people react before reading what I actually posted. And you should know, that regardless of what one writes, SOMEONE will ALWAYS try and spin what was posted..........

[sudopod]

37. Sigh, never mind. nt

[rd_kent]

38. Oh, ok. Thanks for your input.

[Gold Metal Flake]

15. Ooh. Tough guy.

"Flame away......"

[rd_kent]

17. Tough guy?

Project much? Did you have something to say?

[Gold Metal Flake]

24. Oh, no. I can't improve on your post..

I want everyone to see it.

[rd_kent]

30. Well, thanks then.

Perhaps you could aspire to actually have an opinion and be brave enough to say it instead of disparaging others that do.....

[Gold Metal Flake]

39. Ooh, tough guy!

[rd_kent]

40. Repitition....it suits you......

Like a 5 year old repeating "I know you are, but what am I?"

Looking forward to seeing you in another post where you actually have something to say......

[virgogal]

11. I've bought and sold property but always had an attorney watching

my back.

Why on earth didn't these folks,especially where they say they are illiterate?

[Gold Metal Flake]

12. How are they to pay for an attorney?

Maybe they could ask ACORN for help. Any wonder why ACORN is under attack by the zombie army of the corporatists?

Maybe if people where not being bombarded with RW lies 24/7 by the giant corporate media machine they might know where to get help. But poor folks are being to to fear and hate groups like ACORN and like government assistance groups.

Only Democrats can help these people, but they are told to fear and hate us. And in this thread people are blaming the victims.

[Greyhound]

34. Blame anyone except the parasites who profited from this, but the victim is still the number

one choice in scapegoating.

[sudopod]

16. Research shows that

illiteracy is negatively correlated with income, while availability of lawyers is positively correlated with income.

I'm sure that's not intuitively obvious to the casual observer, though.

[Sinti]

14. Predatory capitalism. It's all around you.

They get the house, and the money, a win-win situation - the probably win the "insurance" bet, too, on this one so they get that money also. It would be highly advantageous up to a point to do this on purpose.

In the long run no one wins in this system, it's a black hole. The system itself is destructive to human life. The problem starts with the "greed is good" mentality, and the idea that dollars have some virtue of their own (other than as a representative for real goods and labor).

This ain't your grand daddy's capitalism...

[SoCalDem]

21. keywords

$280,000 loan
unwittingly
adjustable-rate
she signed the documents that were put in front of her
fraudulent application
works at a Wal-Mart
roofing contractor
"knowed me and my husband were illiterate"
an inflated income statement

......

Illiterate or not, when you sign your name on a legal document, you are VOUCHING for what's in it.

[OneTenthofOnePercent]

22. +1

[Nikki Stone1]

23. I guess they should have brought their own reader with them

...

[SoCalDem]

25. Actually, YES! they should have

Even people who can read, often cannot understand 400 pages of legalese.

Signing stuff you do not understand, often ends badly.

[Gold Metal Flake]

26. What a fun game you/ve invented!

Let me try!

unwittingly
thought she'd refinanced into a fixed-rate mortgage
that's what she'd told the broker she wanted
"Want a fixed rate this time!!"
income was correctly listed
someone at Lincoln Mortgage put in a new number
The number was a complete fabrication
But lenders, who would simply sell the loan to investors, had a huge, indiscriminate appetite for borrowers.
loan was, in fact, a lie.
Lincoln Mortgage broke the law
He just talks about suicide

[SoCalDem]

28. Not a game at all..just facts.

"People" who "tell" you "something" can be lying, and often are. What you sign for on a legal document, is what you end up with.

After the fact, there is always handwringing, and sorrow over the shitty deal that was made, but it does not alter the fact that legally, you are bound to what you sign for..which is why there are laws that dictate age-requirements for signing a legal document. If you are "impaired" and you KNOW it, you need to protect yourself, and not rely on "someone" (especially someone whose income depends on getting people to sign stuff) to be interested in protecting you

I feel sorry for these people, but unless there are some pro bono lawyers interested in filing suit against these sharks (many are already out of business), the people the fraudsters cheated will probably remain cheated.. wiser, but still cheated

[sudopod]

29. Funny how that works both ways, innit? nt

[Stumbler]

33. "But, if I can afford an attorney to read all my docs, why can't they do the same?"

While there is something to be said of personal responsibility, this is just one of a multitude of examples of banking employees looking at an easy commission, with complete disregard for those who couldn't reasonably look out for themselves. As someone stated earlier, 400( or even 4) pages of legalese is more than the average person can comprehend. God forbid you are illiterate (Thanks tax-consuming, privately-owned, for-profit charter schools!!!).

I'm always astonished at those who say it's the borrower's fault they got in over their heads. As if the lenders had absolutely no imput into the equation, whatsoever. (Hannity!) While to some degree, both sides are to blame, the borrower wouldn't have had any access to such a wonderfully short-term interest rate if the lenders didn't offer them in the first place. The fact that those businessmen (and businesswomen) then went on to fraudulently alter the borrower's documents just serves to prove this point in 2 dimensions.

[xchrom]

36. well -- this was an enlightening and very sad read. nt