tag:blogger.com,1999:blog-7237633934633144064.post7360637328665830069..comments2024-03-26T10:01:18.135-04:00Comments on Living the Frugal Life: When It Hits Close to HomeKatehttp://www.blogger.com/profile/18017959421018964001noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-7237633934633144064.post-39674256584518135512010-05-13T18:12:42.363-04:002010-05-13T18:12:42.363-04:00It is incredible that you could blame this on the ...It is incredible that you could blame this on the mortgage broker. While you are correct they should have waited until they had 20% down that doesn't translate this into the mortgage broker doing something shady. Your cousin needs to take this problem on before the balloon is due. If as you imply the balloon is only for the other 10% of the mortgage then this problem can be solved. They need to scrimp, sell, and save so they have the full balloon payment when it falls due. It is unlikley that their home has gone up in value and therefore a refinance is out of the question. Seriously! This is a big deal. They should sell one of their cars, take a second job, sell unwanted items, have a garage sale, do whatever it takes to scrape up that 10% before the balloon comes due. Once they get past that, assuming the underlying mortgage is a standard 20-30 year contract, they will be allright. But if they fail to meet this challenge they will lose the house.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-61350705805264759782009-12-06T18:51:56.050-05:002009-12-06T18:51:56.050-05:00>Somehow I would bet that those who draw up the...>Somehow I would bet that those who draw up the contracts have covered their bases pretty well<br /><br />Could be.<br /><br />Although in many cases, the entity that currently holds the mortgage did not bother to obtain the original loan document, which has allowed many homeowners to delay foreclosure proceedings for quite a while.<br /><br />If you know someone who has been served with a foreclosure notice, you might mention to them the possibility of demanding the original document in court: for "securitized" mortgages, this is often quite difficult.Joelhttps://www.blogger.com/profile/16755460714090772432noreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-13811796478999930812009-12-06T07:57:53.018-05:002009-12-06T07:57:53.018-05:00Thanks for the good wishes, everyone.
Wendy, yeah...Thanks for the good wishes, everyone.<br /><br />Wendy, yeah, I read your post along similar lines just after I finished the first draft of this post. A lot of people get themselves into these sorts of binds.<br /><br />Amy, that's a big decision! Glad to hear you're at peace with the decision to sell. I look forward to hearing how your journey progresses.<br /><br />Joel, interesting points. Somehow I would bet that those who draw up the contracts have covered their bases pretty well as far as protecting their interests against those who would come back and claim they didn't understand when they signed.<br /><br />Anon, I agree that professionals can project an air of competence. But as my cousin's example shows, that competence is often to no one's benefit but their own.<br /><br />Annodear, I think he does get it in the sense that he knows they need to be very conservative with their money. As I said, I didn't want to pry, but I would guess they're putting a good bit into savings. I hope it's enough, between their savings, and the chance for a refi, to make things work out for them.Katehttps://www.blogger.com/profile/18017959421018964001noreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-22089372257268379322009-12-05T11:29:23.543-05:002009-12-05T11:29:23.543-05:00I feel for anyone just scrimping by. I have not ha...I feel for anyone just scrimping by. I have not had a mortgage for over 15 years now and on a very fixed and limited income, this has been the saving of me from real homelessness. Granted, none but the most pressing repairs have been done to my home and my furniture is of the most basic type, but I will be completely debtfree by the end of March 2010. Nothing can describe the joy it gives me to see my debt disappearing month by month.Janethttps://www.blogger.com/profile/17643680000059427128noreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-28739719960051185932009-12-05T10:48:19.562-05:002009-12-05T10:48:19.562-05:00I hope things work out for your cousin and his fa...I hope things work out for your cousin and his family. We just re-financed for 10 yrs at 4.50% and are still on target for early payoff. It is possible to get really good rates these days, perhaps they have some equity that could help them qualify for a re-fi? We re-financed with our current mortgage company and had no trouble even though I am working only 10 hours a week down from 40. There is money available and a great time to shop for it is before they get in to trouble. I'm sure you did a great job in helping them understand their situation.Again-best wishes to them.ThiftedBlisshttps://www.blogger.com/profile/13783570455281374166noreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-63967189935806647582009-12-05T00:11:42.690-05:002009-12-05T00:11:42.690-05:00Sounds like an unscrupulous mortgage broker, just ...Sounds like an unscrupulous mortgage broker, just looking for their percentage. Sad, too, that your cousin didn't 'get' what a balloon payment meant ~or~ chose to gloss it over, rationalizing that it was so far in the future that something would just *happen* to make the money appear. <br /><br />Not everyone makes good choices or manages their money well. My husband is terrible at it ~ but luckily he's got me. And I don't think it's even necessarily a lack of brainpower, but more that everyone is smart in their own ways, and attitudes toward money vary greatly. I had friends who won 1/4 million $US on the lottery, and instead of buying a house outright, they did a mortgage with a balloon payment and lost the house when it came due. Idiotic from my point of view, but I understand the realtor/money person 'sold' it as a tax advantage being able to write-off the interest. So who knows? <br /><br />I hope your cousin understands that they need to put away enough money starting NOW to be able to cover the balloon payment. However much the balloon payment is, divided by how many months they've got before they've got to pay it. <br /><br />One other idea... my brother dipped into his 401K ~ borrowing money from himself ~ to pay his balloon payment. Maybe that's an option for them.<br /><br />Sorry so long!<br />Wishing them the best.Annodearhttps://www.blogger.com/profile/05965053358392747637noreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-38988620301226946852009-12-04T17:56:22.443-05:002009-12-04T17:56:22.443-05:00I am currently in Escrow so I understand somewhat ...I am currently in Escrow so I understand somewhat how this happens. The whole process is scary and overwhelming and even if you do read the small print it's hard to understand what it all means. I think the very human response is to trust the "professional" be they mortgage broker or realtor. If they tell you something is standard practice, it's hard to argue with them even if you've done the research.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-84428381583580964592009-12-04T13:27:14.960-05:002009-12-04T13:27:14.960-05:00Contract law is a very interesting subject.
It pr...Contract law is a very interesting subject.<br /><br />It pre-dates the English legal system we use here in America, and, rather than having a foundation in statutes and scholarly reasoning, the bedrock of contract law is the reasonable expectations of normal people.<br /><br />I am not a lawyer, but as I understand it, any written contract is merely a record of shared understanding between the two parties. If one party did not understand, the contract never existed.<br /><br />If so-called "contracts" have begun to run contrary to a normal person's expectations, they have the same status as un-constitutional laws.Joelhttps://www.blogger.com/profile/16755460714090772432noreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-5248456286724445292009-12-04T11:32:47.666-05:002009-12-04T11:32:47.666-05:00There's a reason for the old saying 'cavea...There's a reason for the old saying 'caveat emptor' translated "Let the buyer beware". We've all been snagged a time or two and eventually we become a little wiser. Unfortunately, this one may be costly for them. A lot can happen between now and that balloon payment, and while I wouldn't advise going into it with that "hope", perhaps now that they are in it, a solution will arise. I pray it works out.<br /><br />We are on the west coast and have decided it is time to downsize (we don't want to leave CA if we can stay). River Rock Cottage is going on the market Monday. I thought I'd be really sad, but it is actually reassuring knowing that we are making a wise and responsible choice. I'm excited to see what God has in store for us! Whatever it is, it certainly won't be a boring journey!!!Anonymoushttps://www.blogger.com/profile/00564840073358020600noreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-45489623301480638282009-12-04T09:12:58.735-05:002009-12-04T09:12:58.735-05:00I've been in a similar situation as your cousi...I've been in a similar situation as your cousin - without the house, though. I feel for him and his wife, and I hope that they'll be able to refi with a more reasonable loan once they have a bit of equity in their home and don't need a downpayment.Wendyhttps://www.blogger.com/profile/04642417312794814066noreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-2144063730432463502009-12-04T08:59:34.354-05:002009-12-04T08:59:34.354-05:00I also hope everything turns out well for them. Oh...I also hope everything turns out well for them. Oh, Not just thousands. Try a couple of million or more.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7237633934633144064.post-8508951368232517972009-12-04T08:07:44.474-05:002009-12-04T08:07:44.474-05:00This really sums things up, doesn't it. I hope...This really sums things up, doesn't it. I hope everything will go well for them.Hannahhttp://cookingmanager.comnoreply@blogger.com