Judge Wipes Out Couple's Mortgage Debt

[Parkbandit]

Nov. 27) -- A New York couple has a lot to be thankful for this Thanksgiving weekend after a judge canceled the half-million dollar debt they owed on their Long Island home.

Diane Yano-Horoski and her husband, Greg Horoski, were at risk of being thrown out on the street as their California bank pursued foreclosure actions, news reports said.

Suffolk Judge Jeffrey Spinner erased $525,000 in mortgage payments that OneWest Bank was demanding from the couple. That includes $291,000 in principal and $235,000 in interest and penalties, WABC-TV New York reported.
The decision leaves the couple completely debt-free on their home. The Horoskis were only paying interest on their mortgage after falling behind due to health problems and a change in their interest rate, WABC said. They said they asked OneWest to refinance the loan but the bank refused.

The Horoskis' daughter said the decision came as a huge surprise. "My parents are good people. They're smart people, and I feel bad they've had poor luck, and I'm happy it's been changed," she told reporters.

Spinner slammed the bank's "harsh, repugnant, shocking and repulsive" acts and said the bank "must be appropriately sanctioned so as to deter it from imposing further mortifying abuse against [the couple]," the New York Post reported. The newspaper called Spinner's move a "bombshell decision."

OneWest issued a statement saying, "We respectfully disagree with the lower court's unprecedented ruling and we expect that it will be overturned on appeal."

http://news.aol.com/article/suffolk-judge-jeffrey-spinner-cancels/788457?icid=main|aim|dl1|link4|http%3A%2F%2Fnews.a ol.com%2Farticle%2Fsuffolk-judge-jeffrey-spinner-cancels%2F788457

[Gelston]

OneWest issued a statement saying, "We respectfully disagree with the lower court's unprecedented ruling and we expect that it will be overturned on appeal."

This makes me a sad panda.

[Asha]

Hippy fucking judge

[Kuyuk]

Good. Teaches banks not to be cocksuckers.

[Paradii]

and how do we teach people not to buy what they can't afford?

[Methais]

and how do we teach people not to buy what they can't afford?

Sounds like they could afford it at the time of purchase. Or did you miss the part about how they fell behind due to health problems and the bank jacking up their interest rate?

[Gan]

Good. Teaches banks not to be cocksuckers.
It wont. It will just make banks go to greater lengths to protect their investment when they make loans. And hire better attorneys.


Sounds like they could afford it at the time of purchase. Or did you miss the part about how they fell behind due to health problems and the bank jacking up their interest rate?
The only way a bank can jack up an interst rate is if the loan was an adjustable rate loan - and thats known from the beginning. I'm not excusing the bank's behavior when the loan became delinquent - they were probably asses. And in today's economy - shit happens with regards to personal finances and employment. But this ruling is going to set bad precedent for mortgagees that are in default and its also going to affect how banks view risk when making loans which could parlay into higher interest rates or reduced credit availability.

The judge should have allowed fines and or damages and let the homeowners use the funds to pay the note off rather than striking the debt directly from the real property records. In my opinion.

[Asha]

This ^

[Gelston]

They should have gotten insurance for it, honestly. It'll cover you if you get sick and can't pay your debts.

[Paradii]

Sounds like they could afford it at the time of purchase. Or did you miss the part about how they fell behind due to health problems and the bank jacking up their interest rate?


Oh, I was going to edit and mention that I meant in general and not about this particular case. As you can see, I did not.

[Belnia]

I'm curious how much of that $235,000 was actual interest and how much was penalties and fees stacked up by the bank. Still a ridiculous amount when it starts approaching the principal of the loan though.

[The Ponzzz]

Yeah, your mortgage shouldn't be more than 3x what you make (gross) in a year. And you should have 10% of the mortgage in some form of savings (or put 20% down upon closing). The majority of home buyers don't do any of that.

[Seran]

I do not see how any judge can wipe out a debt without proving criminal intent outside of a bankruptcy court. What legal precedent was involved to overturn a banks contractual right to foreclose on a property that it's occupants can no longer afford to make payments on? I sincerely hope this judge is sanctioned for stepping way out of bounds in committing theft in transferring the banks asset to these debtors.

As others have said, there are responsibilities one has be held accountable for in applying for a home mortgage in a sole-support scenario. How many thousands, and tens of thousands of families have seen their balloon mortgages get rolled into a higher interest fixed rate loan? This family is not special, they just got a super-liberal judge.

[Gan]

Yeah, your mortgage shouldn't be more than 3x what you make (gross) in a year. And you should have 10% of the mortgage in some form of savings (or put 20% down upon closing). The majority of home buyers don't do any of that.

Yea, it sucked when most folks lost 30% or better in their stock/mutual fund/401k portfolios. Still sucks actually. :(

[Stanley Burrell]

and how do we teach people not to buy what they can't afford?

You mean like health problems?

[Sean of the Thread]

Wow wtf.

This has to be overturned... if not the slippery slope of debt erasing would be insane.

[Paradii]

You mean like health problems?


Would you like to see everyone with health problems be able to clear their debt? People should be entering into these agreements with the knowledge that shit happens. Rainy days, ya'know.

[Clove]

I doubt the judge would have voided the contract had the bank been willing to refinance the note. Or even obey prior court orders.

The same bank is in another litigation with an 89 year old woman for refusing to obey two court orders to cease its foreclosing process on her home.

I honestly don't see this as a bad precedent, the bank was trying to get blood from a stone. It will be interesting to see how this holds up in appeals but what the judge actually did was find punitive damages for the amount of the mortgage plus interest and penalties due, essentially forcing the bank to pay the family what it owes on the house. I'm sure the bank will appeal but the judge essentially neutralized their ability to foreclose throughout the appeal process by allowing the family to satisfy the debt (if my business law is up to snuff).

[Seran]

Punitive damages for enacting rights it has to protect itself from monetary loss involved with nonpaying tenants? Sure it'd work like that if we were some socialist nation, but we are not.

A bank cannot be forced to offer a refinance to anyone, particularly if their income doesn't suffice, or their credit is shoddy. Nothing would have stopped this couple to going to one of any other of a dozen and more lenders who can refinance that loan, but their inability to do so speaks poorly of their finances/credit as well.

At most the judge should have given the family thirty days to pack up and move out without obligation or negative marks, but even that would be stretching it. Once again, the judge severely overstepped every imaginable boundary in stealing the house from the bank and awarding it to the family.

If we sit by and let government officials take what they will without guiding precedent, then we might as well close up shop now and bow down to the dictatorship.

[Seran]

the bank was trying to get blood from a stone

I personally grate my teeth hearing someone spout that bit of nonsense, or the even less apt 'you can't get blood from a turnip.' My answer to everyone who has told that to me during my years as a collector was simply, "with that attitude, you will be a turnip for the rest of your life." Shortly before enforcing a judgment and garnishing their wages.

If one doesn't want to be squeezed, one shouldn't have put themselves under obligation to a bank to start with. Owning a home is a privilege, not a right, you have to earn that right, and also maintain it.

[Latrinsorm]

If we sit by and let government officials take what they will without guiding precedentGovernment officials make new precedent all the time, even at the expense of old precedent. Whether it is progress or regress depends on the change itself, not its newness.

[Daniel]

If we sit by and let government officials take what they will without guiding precedent, then we might as well close up shop now and bow down to the dictatorship.


Lol.

Yea. Our lives are so horrible when we can't be fucked over by soulless corporations who go beyond standard decency with impunity.

You must really be some joyless motherfucker.

[Stanley Burrell]

Would you like to see everyone with health problems be able to clear their debt? People should be entering into these agreements with the knowledge that shit happens. Rainy days, ya'know.

Definitely, if it's through their own means. It just looks like this particular judge was feeling the Thanksgiving spirit and decided to give them a pass. Not the end of the world.

[Gelston]

Again, there is an easy way to prevent yourself from defaulting on loans due to health issues. Its called insurance. I don't see why you wouldn't get this coverage on something as big as your home mortgage.

[Sean of the Thread]

I doubt the judge would have voided the contract had the bank been willing to refinance the note. Or even obey prior court orders.

The same bank is in another litigation with an 89 year old woman for refusing to obey two court orders to cease its foreclosing process on her home.

I honestly don't see this as a bad precedent, the bank was trying to get blood from a stone. It will be interesting to see how this holds up in appeals but what the judge actually did was find punitive damages for the amount of the mortgage plus interest and penalties due, essentially forcing the bank to pay the family what it owes on the house. I'm sure the bank will appeal but the judge essentially neutralized their ability to foreclose throughout the appeal process by allowing the family to satisfy the debt (if my business law is up to snuff).

Stones don't take out mortgages...

[Ker_Thwap]

This is simple. It was a secured loan, they never owned the house. The bank paid for the house. The couple don't own the house until the final payment is made.

If you sign a mortgage you agree to pay the bank. If for any reason at all you can't pay the bank, you resell the house (subject to the lien), you voluntarily turn the property back over bank (if you can't sell it for enough), you rent out the house and go live with family, etc.

It's the nature of humans that they get sick, get divorced, lose their jobs, get old and feeble, and generally have sob stories. This is the reason why lenders require mortgage documents.

This judge should be disbarred if he can't understand basic contract law.

[Soulpieced]

I don't get it either. You signed a legally binding contract agreeing to the terms and conditions. It is not the banks obligation to just let you refinance with no additional capital out of the goodness of their hearts. That's basically like saying hello Mr. Bank, how would you like to make less money over the life of the loan, and I won't even give you any money down to make it worth your while in the short term? Sign me up! Frankly, if you can't pay your mortgage based on what you signed up for, you have no claim on that home, and this decision was pretty ridiculous.

[Soulpieced]

Fuck, I just read another version of the article and said bank received $1B in bailout money that was "supposed" to be used to assist with helping writedowns. Post and stance withdrawn.

[Daniel]

Fuck, I just read another version of the article and said bank received $1B in bailout money that was "supposed" to be used to assist with helping writedowns. Post and stance withdrawn.

Irony.

[Belnia]

Don't get to take government bailout money and continue being a jerkface bank.

[Soulpieced]

Here's the more appropriate version.

http://www.nypost.com/p/news/local/j...Y58z6gu1AQbWMI

A Long Island couple is home free after an outraged judge gave them an amazing Thanksgiving present -- canceling their debt to ruthless bankers trying to toss them out on the street.

Suffolk Judge Jeffrey Spinner wiped out $525,000 in mortgage payments demanded by a California bank, blasting its "harsh, repugnant, shocking and repulsive" acts.

The bombshell decision leaves Diane Yano-Horoski and her husband, Greg Horoski, owing absolutely no money on their ranch house in East Patchogue.

Spinner pulled no punches as he smacked down the bankers at OneWest -- who took an $814.2 million federal bailout but have a record of coldbloodedly foreclosing on any homeowner owing money.
YOU OWN IT: Greg Horoski won his battle to keep his Patchogue one-level ranch home, as a judge called OneWest bank's foreclosure efforts against Horoski and his wife "repulsive."

"The bank was so intransigent that he [the judge] decided to punish them," Greg Horoski, 55, said about Spinner's scathing ruling last Thursday against OneWest and its IndyMac mortgage division.



It erased up to $291,000 in principal and $235,000 in interest and penalties.

The Horoskis -- who had been paying only interest on their mortgage -- had no equity in the home.

Horoski, who had begged the bankers to let him restructure the loan, said, "I think the judge felt it was almost a personal vendetta." Dealing with the bank, he said, was "like dealing with organized crime."

OneWest said, "We respectfully disagree with the lower court's unprecedented ruling and we expect that it will be overturned on appeal."

It claimed it "has been extremely active in working with consumers on home loan modifications through the Obama administration's Home Affordable Modification Program and other loan modification initiatives."

The bank is owned by a private equity group that purchased the failed IndyMac bank.

Yano-Horoski, a college professor of English and cognitive reason, and Horoski, who sells collectible dolls online, bought their 3,400-square-foot, one-level house 15 years ago for less than $200,000.

In 2004, court records show, they refinanced, paying off their original mortgage with part of a $292,500 sub-prime loan from Deutsche Bank. They used what was left for health care and for his business.

The loan carried an initial adjustable interest rate of 10.375 percent, which soared to 12.375 percent.

It eventually ended up being either owned or serviced by IndyMac, and the bank sued the couple in July 2005 when they began having trouble making payments because of Horoski's health problems.

After a foreclosure was approved last January, Yano-Haroski successfully asked for a court settlement conference.

Spinner excoriated OneWest for repeatedly refusing to work out a deal, for misleading him about the dollar amounts at stake in the case, and for its treatment of the couple over months of hearings.

OneWest's conduct was "inequitable, unconscionable, vexatious and opprobrious," Spinner wrote.

He canceled the debt because the bank "must be appropriately sanctioned so as to deter it from imposing further mortifying abuse against [the couple]."

The bank 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.

[Belnia]

OneWest's conduct was "inequitable, unconscionable, vexatious and opprobrious," Spinner wrote.

The Honorable Judge SAT Words.

[Asha]

The bank 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.

Wow..
Wow.

[Seran]

In 2004, court records show, they refinanced, paying off their original mortgage with part of a $292,500 sub-prime loan from Deutsche Bank. They used what was left for health care and for his business.

So they refinanced a home for roughly 150% of what they paid for it (or more, since the 200k price was 'less than'), which was irresponsible to start with, then sunk the rest in what appears to be a failed business venture. So here with have a blatant case of a man who made a stupid decision, getting rewarded by a liberal judge in erasing his debt. Yes it says health care, but if the man was fit enough to run a business, or his wife/children could take over, then it wasn't that damn serious to start with.

For all of you honking about a bank should do this, or is obligated to do that, take a step back and realize this would have been the SECOND time in five years he refinanced a home. Since it was already upside down on the original buying price, and presumably the value in current market conditions, the bank would have to be bat-shit insane to refinance him a third time AFTER the clear bad judgment shown, and the lack of financial stability.

This needs to be overturned, and the previous judge sanctioned. If the Conservatives were smart, they would use this as an example of why banks are not making the same loans -- there is too much risk. Now if the Liberaterians were even smarter, they'd point out that this is why government should never be allowed to get so big, or so powerful as to be able to steal the assets of one entity and give it to another.

[Kuyuk]

the bank would have to be bat-shit insane to refinance him


Only worthwhile thing in your post.

So, the bank is bat shit insane, yet they should be rewarded?

[Clove]

Punitive damages for enacting rights it has to protect itself from monetary loss involved with nonpaying tenants? Sure it'd work like that if we were some socialist nation, but we are not.Do you know enough about the details of the case to assume that this is what occurred? This bank has already ignored two court orders in another foreclosure case. I would not be surprised if they overstepped their bounds in the case described which became the judge's reason for punitive damages.

Or it may the judge that overstepped his authority. I suppose the appeals will tell.

The article doesn't provide enough detail itself to know, but I did a little deeper digging and discovered that the bank in question is not always playing by the book with its debtors.

[Stanley Burrell]

So they refinanced a home for roughly 150% of what they paid for it (or more, since the 200k price was 'less than'), which was irresponsible to start with, then sunk the rest in what appears to be a failed business venture. So here with have a blatant case of a man who made a stupid decision, getting rewarded by a liberal judge in erasing his debt. Yes it says health care, but if the man was fit enough to run a business, or his wife/children could take over, then it wasn't that damn serious to start with.

For all of you honking about a bank should do this, or is obligated to do that, take a step back and realize this would have been the SECOND time in five years he refinanced a home. Since it was already upside down on the original buying price, and presumably the value in current market conditions, the bank would have to be bat-shit insane to refinance him a third time AFTER the clear bad judgment shown, and the lack of financial stability.

This needs to be overturned, and the previous judge sanctioned. If the Conservatives were smart, they would use this as an example of why banks are not making the same loans -- there is too much risk. Now if the Liberaterians were even smarter, they'd point out that this is why government should never be allowed to get so big, or so powerful as to be able to steal the assets of one entity and give it to another.

It totally ruined my day as well. Srsly.

[Clove]

For all of you honking about a bank should do this, or is obligated to do that, take a step back and realize this would have been the SECOND time in five years he refinanced a home. Since it was already upside down on the original buying price, and presumably the value in current market conditions, the bank would have to be bat-shit insane to refinance him a third time AFTER the clear bad judgment shown, and the lack of financial stability.I agree that the family made extremely poor financial decisions; however in the current climate banks are much better served to negotiate and refinance with debtors who are motivated to keep their homes and make good on their debts for a variety of reasons. Such as avoiding bad publicity, lengthy and expensive court battles that can result in unfavorable decisions, and declining property values that make recovering even the principle on a note difficult.

We can all agree that the consumer poorly managed their finances. What surprises me is you don't hold the bank culpable at all for their financial decisions. Their reputation for handling foreclosures aside, why did they give this family a note in the first place? I suppose prior to this the family had a history of excellent financial practices and liquidity. No? That's why the bank gave them such a shitty loan? I guess the bank took a pretty dicey risk too. Which is fine in and of itself, but if they're going to take steep financial risks themselves they'd better be prepared to keep the most excellent, blameless foreclosure practices to avoid even a hint of appearing predatory and vicious.

[Drew]

For everyone cheering this judge, I hope you don't ever plan on taking out a mortgage. If the judge is allowed to do this other judges will start doing it and guess who will pay for it? Anyone who takes out a mortgage. This will be another form of risk factored into what you pay, and will raise your costs substantially.

Do you really want to pay a higher interest rate on a future home purchase to allow some foolish people to chase their dreams of selling dolls online? Because that is what you'll be funding, no risk home ownership to those who already have mortgages. All the risk on those who are getting them in the future.

[TheEschaton]

So you're saying selling dolls online is not a worthy enough occupation to own a house?

-TheE-

[Drew]

So you're saying selling dolls online is not a worthy enough occupation to own a house?

-TheE-

Not if you don't make money doing it.

[TheEschaton]

Where's the implication that she didn't make money doing it? That they can't afford a house on just her salary?

Maybe we should discuss why it is near impossible to own a house on one salary, how it discourages entrepeneurship and creativity, etc, etc.

[TheEschaton]

As a postscript, I don't see how the judge could really do this legally, but it doesn't seem that he's invoking a legal argument. He is enforcing severe punitive damages on the bank by wiping away the debt because of malfeasance, malfeasance being enough to break any contract I know of.

This is, for once, an actual case of judicidial activism. Up for debate, in my opinion, is whether judicial activism is sometimes warranted. Brown v. Board of Education, along with most major protections afforded in the 20th Century, are technically judicial activism every time it deviates or ignores precedent. This judge may have done it inartfully, but a circuit court judge, or SCOTUS, could certainly narrowly judge that what he did was right.

-TheE-

[Stretch]

They owe money. They didn't pay. They opted to take an extraordinarily risky interest-only loan, knowing at some point the rate would jack up before they could pay the principal down.

Why exactly are they entitled to restructuring? It might be in the bank's best interests to do so, but it doesn't HAVE to do anything that isn't stipulated in the original contract terms.

EDIT: Just read SP's post about the bank receiving stimulus money. It's not like the money they got from the government was free- it came at the cost of either interest or equity given to the government, just like any other loan or warrant. They don't get to just tag on several hundred million dollars on their earnings if they don't use the money to bail people out- it shows up as cash on a balance sheet.

[TheEschaton]

I haven't read the contract in question, but most mortgages include a clause about restructuring, no? I skipped all property courses after regular property, as that isn't really my thing, but if there's a clause allowing restructure in the contract, and one side refuses to invoke the clause, that allows for, at the very least, arbitration.

COntracts are set up for the mutual benefit of both parties, in theory. If one party tried to cherry pick what it wants from the contract without allowing the other party to ask for its rights under other parts, that is the basis of a lawsuit.

[Gan]

Here's the more appropriate version.

http://www.nypost.com/p/news/local/j...Y58z6gu1AQbWMI

A Long Island couple is home free after an outraged judge gave them an amazing Thanksgiving present -- canceling their debt to ruthless bankers trying to toss them out on the street.

Suffolk Judge Jeffrey Spinner wiped out $525,000 in mortgage payments demanded by a California bank, blasting its "harsh, repugnant, shocking and repulsive" acts.

The bombshell decision leaves Diane Yano-Horoski and her husband, Greg Horoski, owing absolutely no money on their ranch house in East Patchogue.

Spinner pulled no punches as he smacked down the bankers at OneWest -- who took an $814.2 million federal bailout but have a record of coldbloodedly foreclosing on any homeowner owing money.
YOU OWN IT: Greg Horoski won his battle to keep his Patchogue one-level ranch home, as a judge called OneWest bank's foreclosure efforts against Horoski and his wife "repulsive."

"The bank was so intransigent that he [the judge] decided to punish them," Greg Horoski, 55, said about Spinner's scathing ruling last Thursday against OneWest and its IndyMac mortgage division.



It erased up to $291,000 in principal and $235,000 in interest and penalties.

The Horoskis -- who had been paying only interest on their mortgage -- had no equity in the home.

Horoski, who had begged the bankers to let him restructure the loan, said, "I think the judge felt it was almost a personal vendetta." Dealing with the bank, he said, was "like dealing with organized crime."

OneWest said, "We respectfully disagree with the lower court's unprecedented ruling and we expect that it will be overturned on appeal."

It claimed it "has been extremely active in working with consumers on home loan modifications through the Obama administration's Home Affordable Modification Program and other loan modification initiatives."

The bank is owned by a private equity group that purchased the failed IndyMac bank.

Yano-Horoski, a college professor of English and cognitive reason, and Horoski, who sells collectible dolls online, bought their 3,400-square-foot, one-level house 15 years ago for less than $200,000.

In 2004, court records show, they refinanced, paying off their original mortgage with part of a $292,500 sub-prime loan from Deutsche Bank. They used what was left for health care and for his business.

The loan carried an initial adjustable interest rate of 10.375 percent, which soared to 12.375 percent.

It eventually ended up being either owned or serviced by IndyMac, and the bank sued the couple in July 2005 when they began having trouble making payments because of Horoski's health problems.

After a foreclosure was approved last January, Yano-Haroski successfully asked for a court settlement conference.

Spinner excoriated OneWest for repeatedly refusing to work out a deal, for misleading him about the dollar amounts at stake in the case, and for its treatment of the couple over months of hearings.

OneWest's conduct was "inequitable, unconscionable, vexatious and opprobrious," Spinner wrote.

He canceled the debt because the bank "must be appropriately sanctioned so as to deter it from imposing further mortifying abuse against [the couple]."

The bank 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.

Thanks for posting. More information available with this article.

To the thought that the owners did not own the property - thats incorrect. They hold the deed, they own the property. The technical side is that they have a lien against the property because they used it to secure a debt (loan). The bank has to follow the procedures outlined in the Deed of Trust in order to foreclose. Thats where I'm thinking that the judge found the bank in error and voided the debt contract, thus erasing the note (and the debt). I still find this a bad precedent nonetheless. The bank should have been fined out the ass with the judge's direction that the note be paid before the remaining funds used at the proeprty owner's discretion.

I'm also faulting the state's real property and lending laws that allow someone to take out 150% equity on their property. Thats batshit insane. In Texas, which has some of the toughest lending laws in the nation, only allow for 75% equity to be withdrawn from real property at any given time. Only 1 equity loan to be out at a time, and only 1 equity loan every 12 calendar months.

I find all parties including the state legislators culpable in this instance. It should be a wakeup call for corrective action all the way around.

[Parkbandit]

So you're saying selling dolls online is not a worthy enough occupation to own a house?

-TheE-

Not if you can't afford to pay for it.

Sorry.. I have difficulty making victims out of stupid people who make stupid decisions. If you are going to risk your house on a business.. and that business fails, then you need to realize your house is part of that failure.

[Seran]

So, the bank is bat shit insane, yet they should be rewarded?

What reward are you referring to?

Both repossession and foreclosure processes are extremely expensive to engage in, particularly in cases where the value of a note receivable exceeds the value of the asset. Following the resale of the property, the resulting deficiency balance obligations and attorneys fees awarded as part of the initial default usually wind up in the losing party filing for bankruptcy.

So in this case, the bank would be out it's attorneys fees, out it's costs to re-market and sell the property, and saddled with whatever additional costs were needed to make the property sell-able again. Sure they have the property back, but at a very steep cost.

[Seran]

Do you know enough about the details of the case to assume that this is what occurred?

Most settlement conferences are confidential, without transcripts entered into public record. Any comments made are conjecture, or opinions based upon what little facts are known. For that reason,


I would not be surprised if they overstepped their bounds in the case described which became the judge's reason for punitive damages.

The judge has the ability to sanction a party if he/she determines one of the parties are not acting in good faith during the settlement conference. What this judge did in obliterating the balance owed the bank, and giving the property over free and clear was a gross abuse of this power.

In only once instance have I been involved in a case where such sanctions were applied to the opposing party, and that was because their counselor was swearing profusely despite requests from the judge that such language was uncalled for. In that instance, it was a matter of less than $1,500 dollars.

[Seran]

That's why the bank gave them such a shitty loan? I guess the bank took a pretty dicey risk too. Which is fine in and of itself, but if they're going to take steep financial risks themselves they'd better be prepared to keep the most excellent, blameless foreclosure practices to avoid even a hint of appearing predatory and vicious.

You cannot say whether or not the bank did anything untoward, or risky in refinancing the individuals, because nowhere in any of the articles is it stated in detail what the couples financial situations were, nor do we know if the refinance exceeded the value of the home itself.

What we do know is the couple failed to meet it's obligations under their mortgage note, and subsequently were foreclosed upon. Sucks to be them.

[Gan]

I think that the interest rate alone is an indication of the risk the home owners presented with regards to loan position.

If these were A+ borrowers they would not have had such a shitty interest rate. Interest rate is a great indicator of risk and loan position. An A+ position borrower would have had more choices (loan programs) available (rather than an interest only loan at such a shitty interest rate).

[Seran]

Perhaps you are right Gan, though whether or not they chose an ARM vs. a fixed rate due to limited options is conjecture until all the details are known.

The facts remain.

[Clove]

Do you really want to pay a higher interest rate on a future home purchase to allow some foolish people to chase their dreams of selling dolls online? Because that is what you'll be funding, no risk home ownership to those who already have mortgages. All the risk on those who are getting them in the future.No. I want banks to avoid making risky loans in the first place. And when they take those risks I want them to man up and be willing to renegotiate more reasonable terms.

[Clove]

You cannot say whether or not the bank did anything untoward, or risky in refinancing the individuals, because nowhere in any of the articles is it stated in detail what the couples financial situations were, nor do we know if the refinance exceeded the value of the home itself.Yes, I can. Banks don't offer ridiculous rates to people with good credit. The loan itself is an indicator of their financial state; it's not conjecture. Do you sell an apple for 20 dollars each when there's five stores down the street that sell them for 2? That's exactly why banks don't offer loans with ridiculous terms to individuals with good credit.

[Clove]

So in this case, the bank would be out it's attorneys fees, out it's costs to re-market and sell the property, and saddled with whatever additional costs were needed to make the property sell-able again. Sure they have the property back, but at a very steep cost.Which is why it is stupid to refuse a renegotiated loan in this climate; unless you intend to mine individuals with bad credit for as much cash as they can pay, then resell the property.

[Gan]

Perhaps you are right Gan, though whether or not they chose an ARM vs. a fixed rate due to limited options is conjecture until all the details are known.

The facts remain.

For those in the industry, its more than just conjecture. Clove gave a great explanation above as to why.

Competition + good credit position (low risk to bank) = low interest rate.

No competition + bad credit position (high risk to bank) = high interest rate.

Thats how shit rolls in the loan/banking industry (unless you're a congressman and you're good friends with the president of a large bank). No conjecture needed. ;)