Posted by aatatusko on 9/21/07 6:59am
Msg #212372

article in Washington Post

In today's Washington Post there is an article about helping out those in trouble with their mortgages. A few weeks back when President Bush spoke there was outrage on this board that the government would even think about helping out someone who knowingly over extended themselves. Here is a quote from the article, sorry, I tried to link the whole article but couldn't. You can go to washingtonpost.com, it is under Business.

"Clearly, there are some people who we're not going to be able to help," Jackson said. "Especially the yuppies, who have this extravagant decision to have two or three cars and a huge house they can't afford."


He goes on to say that they want to "create a simple one page sheet that lays out what payment the homeowner is on the hook for and how much it could rise". That information is often buried in many pages of legalese that many home buyers do not understand.

So this means one more page for us to have signed, hardly a big deal. If you were refinancing what would you want to see on the 'one page'? I'm thinking of creating a one page and sending it off to the treasury dept., as a concerned homeowner. G/B idea?

Reply by Becca_FL on 9/21/07 8:52am
Msg #212390

I just don't get why all the lawmakers are coming out saying things like the terms of the loan are buried, the borrowers don't understand, etc.. We already have a document that shows the terms of the loan; it's called the Note. The Note is pretty easy to understand...it has the loan amount, the interest rate, the P&I payment, the amortization period, the terms of prepayment, the adjustable rate terms, the adjustable rate ceiling, and then some.

Personal responsibility goes a long way here. If borrowers choose to believe their LO over what was in black and white in front of them, too bad. For someone to say they didn't realize they were taking out an ARM is just ridiculous.

Reply by BetsyMI on 9/21/07 9:20am
Msg #212398

I agree for them to say they didn't realize they were taking out an ARM is ridiculous. But I find most people are not like me. I pay my bills on time, and I would never forget that I had an ARM, never. But I think most people are not as anal and they just forget about it. Personally I'd make a note on the last page of this year's calendar to remind myself to make a note on next year's calendar, and the one after that, etc., so that I would remember. I'd be talking to someone months before that higher rate was going to kick in.

Before I did this job though, when I went through my own closings for my homes I felt it was very difficult to understand the paperwork and the terminology. Maybe because the presenters made it that way. Now after doing closings it seems so simple. But most people don't have the luxury that we do to be able to understand it all because of doing this day after day. They just want to sign and put the paperwork away and forget about it.

Reply by WDMD on 9/21/07 9:27am
Msg #212400

There are alot of borrower's whose LO's pound in their head it's fixed for 3,4,5 however many years. That's all that borrowers hear, the word fixed. They are then convinced they have a fixed rate. I've had several surprised borrowers when they see at the top of the note where it says adjustable rate. I agree that no borrower should be unaware of the terms of their loan, but some only hear what they want to hear.