Thursday, May 19, 2011
One of the eye-opening aspects of blogging here is this: often, if one of us puts up a post that contains the word "mortgage," we get spam in the comments box. I would not be in the least surprised to find a comment on this post tomorrow that reads something like this:
This is a very interesting discussion of will mortgage scammers never cease. I like to read about will mortgage scammers never cease. Will mortgage scammers never cease is very important.
Refi-now [at] lowestrates [dot] com
Since these usually come in response to a post about the latest mortgage industry outrage, it (frankly) pisses me off.
And just tonight, during dinner, I got a call from someone in Newport, CA, claiming to be working for Fannie Mae. He told me my mortgage had "crossed his desk" and he wanted me to know, as a public service, that I could get a much lower rate, and he was prepared to tell me how. I told him . . . well, I suppose this is a family blog, but I told him that I did not think highly of him.
I was naive enough to think that the mortgage crisis would have put, if not an end, at least dampener on this type of despicable activity. This is exactly how so many people's lives were ruined, and exactly why the mortgage industry became such a chaotic, undisciplined, unethical nightmare that lenders can't even produce the note for mortgage loans on which they intend to foreclose.
But if it wasn't apparent before, it should be apparent now that the mortgage crisis -- that is, the crisis of the mortgage industry -- is in the past. Its particpants either walked away before the scam collapsed, or got bailed out if they were left holding the cards.
Now they're back in action. Want proof? The front page of the on-line version of today's New York Times has an ad for "Orange Home Loans As Low as 3.05% APR." Click on the link, and you get an offer for a 5 year fixed rate mortgage loan at 2.99% if you can put 20% down, but with monthly payments set as if the loan were a 30 year fixed rate. In other words, when 5 years have gone, and you need to re-finance, you'll have built up no new equity in the home because you've been paying as if you had 30 years to pay it off, not 5. You'll essentially have to purchase the home again, at a much higher rate. And this isn't some fly-by-night company. At least they require 20% down.
So the crisis of the mortgage industry is over. Instead, what we have now is a foreclosure crisis. A crisis that is rendering families homeless, destroying equity in homes, and in some places (here's looking at you, Florida) undermining the rule of law.
Soon we'll have a restitution crisis.
If we get any spam in response to this post, I'll post it as an addendum here.
Mark A. Edwards
[comments are held for approval (and now you know why), so there will be some delay in posting]