MucheDumbre

I keep hearing about the sub primers and what low lifers they are. How they should have never been trusted with a mortgage in the 1st place. How they deserve what they get for trying to buy something they couldn’t afford and frankly, it’s starting to piss me off.

Owning your own home is something everybody in the country wants to do. Some people wait until the time is just right, they have the perfect job, the perfect car, the perfect ‘other’ and they go out and look for the perfect home. I say Good for them! Good for them for waiting and doing it the better way. These are the upstanding people who are meant to own a home. Because we know from history that these type of people never fail right? It’s only the lower echelon who fail and drain the economy. The low income, low credit score, eternal ‘renters’ are the ones who get foreclosed on.

[/sarcasm]

What is it about a sub primer that they just can’t keep up with their payments? Some of them did bite off more than they could chew. But isn’t that part of the American way? We see something we want and we go after it until we get it, whether we can afford it (or even need it) or not. Sure there were those kind in this whole mess, but that’s not the case for all of them. Some of them were suckered into an initial low payment that ballooned to double that amount in 24-48 months.

The ‘perfect’ person sits there and asks “well didn’t they know they wouldn’t be able to afford that balloon payment?” The answer is yes of course they knew, but guess what. One of the real culprits here, the shady mortgage broker (who works in conjunction with the crooked sub-prime lender, who works with the dishonest appraisers and the title companies) told these people it would be ok. See they told them that in 12 months they could re-finance out of the sub-prime rate and into a conventional mortgage with a lower APR and a lower monthly payment. The best part, that house prices were on the move upward so when they refinanced their home they could get an additional $10K-$15K to do what they wanted with.

Who wouldn’t sign those papers?

Some were undoubtedly able to do this. Even though they were from the lower income and status levels, they were able to refinanced to a better loan. But sadly, others got caught in a system that was designed to fail them.

Here is how mine worked.

Yes, I am a sub primer. Not because I am poor or destitute but because I have a credit rating of about -20. With no medical insurance and two kids, medical bills pile up fast. Plus try getting things off your credit report that didn’t come from you but from some kind of ‘mistake‘. Or try getting things that you did in 1991 off your report. Yes I know, after 7 years they are supposed to be removed….. HA! Right. Tell that to Equifax.

I had lived in my house for years, paying the mortgage on it for the man who owned it for years. I paid the taxes, insurance, mortgage.. He had signed everything over to me giving me total and free reign of the place when I moved in. It was a pretty good contract, I was covered legally and financially and since I couldn’t buy the house because hubby was still on work-comp (and that was a complete cluster-fuck in it’s own right) it was a good deal. Fast forward many years and we decided it was time to just buy the damn house. Our credit sucked but I figured…. What the hell, it doesn’t hurt to call a mortgage broker does it?

Well, no it didn’t and yes it did.

After two “no’s” from conventional mortgage companies, our broker finally said that were could try to go with a ‘hard money loan’, the easiest way to explain this is… we borrowed money from Tony Soprano. Neither of us were worried though because the payments weren’t that bad, the interest not all that terrible, we weren’t doing the balloon payment and like the broker assured us, in a year we could refinance into a conventional loan.

Here’s why that didn’t happen. When you sign these hard-money loans they don’t tell you about the pre-payment penalties and fees that can go up to $30,000. Ok, they do tell you there will be fees, but the assure you they are nominal. $20,000-$30,000 in fees though would eat away at any equity we’d put into in 12-24 months. So for that reason alone, refinancing in the first 12-48 months out of the question.

But that’s just the beginning.

See when you don’t make your payment on time your interest goes up to 18-20%. Some would say, well get your payment in on time. Right, jeez why didn’t I think of that. Hard money lenders sell your ‘note’ to each other, it’s not unheard of for your ‘note’ to be sold every month to someone else. What is the problem with that you ask? Well just this… who do you pay?

When you send your payment into the guy who has your ‘note’ this month 15 days later you get a letter or a call from the new guy asking for his money. Now you have to go to the old guy and get your money from him so you can send it to the new guy, but the old guy doesn’t have your account anymore so he can’t find your payment and it will take a couple days to check. In the mean time your interest is bouncing upwards and the new guy is screaming for his money. What happens if he can’t find it in time? Now you have to come up with another payment or go behind in your payments. That mean late fees and if you’re late enough, lawyer fees until ultimately…foreclosure. You did nothing wrong, you made your payment, but since you are a lowly subprimer….you are screwed.

Luckily I never had that problem. I couldn’t imagine the hell that would be. I live in my own hell, but it’s not as bad as not knowing who to pay every month.

Here is how mine works. I pay my mortgage on or about the 1st of the month. I send it via USPS with a tracking number (the best advice the title company gave me, yes it cost more than direct deposit or a stamp, but you’ll see why that extra cost is worth it). I write my account number on the check and staple it to my payment coupon. Then I send it off. Around the 10th or 12th I’ll start getting calls and letters in the mail asking for payment. Around the 15th I’ll start getting foreclosure threats by phone, email and snail. During this, I’ve checked, not only did they get and sign for the payment, they’ve taken it from my account. So I call the president of the company (yes, I am on speaking terms with the president of my mortgage company. ) anyway, I call him or email him and say “Hey, I paid you here’s the proof” He emails or calls back and says “we’ll check”. Now for the next 7 days or so, while they are ‘checking’ I am getting 4-5 threatening letters/emails and calls a day saying they are hiring attorney’s, that I’m going to lose the house … blah blah blah. (These all make for a great home life by the way, I recommend everyone who has bad mouthed a subprimer, deal with this for just one month.)

So, after not hearing anything for another day or so, I start making my own numerous calls and emails asking what the hell is going on. Finally by about the 24th day or so , just in time for the next payment, I’ll get an email saying “oops”.

Blink

Blink

Oops?

This has gone on every month for almost 2 years now. Why haven’t I refinanced? Well here’s the best part. I’ve racked up thousands in late fees because they can’t seem to credit my account the day I make my payment. The entire time they are telling me I didn’t pay and they are looking for it, I am racking up daily late fees at 18%. Add to that the $20,000 pre-pay penalty and the shitty housing market and maybe you can see why.

June was a doozy. I made my payments. In July I was told that I still owed June. I said “Um, no I don’t. Here is the payment, the date you took it and the person who signed for it” The answer, Oh well some of that was applied to your late fee so you have a balance left over. I called the president again, “I don’t have any late fees because I’ve paid on time” … He looks and tells me that yes, I have late fees because my accounts were not credited on time.

Blink

blink

“Ok, so how much do I owe for June.” His answer,“I don’t know, I’ll get back to you.” I have since paid an additional $300 for June and have been told that is not enough, I need to pay $291.00 more. No reason, no substantiating this debt even after 3 certified letters asking for a breakdown, nothing. In the mean time, I get emails,phone calls and letters daily threatening foreclosure and legal action. I have no idea what I am supposed to pay or what that payment is really for, they are in essences engaging in extortion at this point.

I have an attorney and we are looking into lender liability and fraud. With the receipts, records, calls, emails, not to mention the ulcer and emotional distress I probably have a pretty good case.

I am not a stupid person. I don’t do things half assed and without question. I read what is sent to me, I call and ask ‘what the hell’ when I don’t understand. I stay in contact with my mortgage company. But there are people out there who don’t. They are afraid for one reason or the other. It can be intimidating talking to people like that. At one time I refused to make another payment until they figured out a better way for me to do it. I was sent a stipulation telling me to sign this deed in lieu of foreclosure and then agree to pay off my back late fees at $300 a month + my mortgage over 12 months.

The best part was if I didn’t pay the fees off in that 12 month period they would sign the deed and take the house.

The best best part, you do the math. $300 a month for 12 months doesn’t eqaul $35,000 does it. See if I didn’t read and question everything I would have signed and agreed to something that is mathematically impossible.

How many people are to scared to argue? How many people aren’t educated enough to read what was sent to them? How many people have access to free legal and can ask “hey, is this right?” ? Judging by the subprime meltdown, I’m going to say not too many.

So the next time you want to call a sub-primer a subhuman think about my story. We are a two-parent working family. We make decent money and have decent things. Sure we have shitty credit but we didn’t deserve the butt-fuck we got and continue to get because we wanted to finally own the house we’d been living in and turn it into our home.