Foreclosure Aid for Borrowers?
Sheryl LandrumLoanBiz Columnist
On April 12, 2007, The San Diego Union-Tribune's ran an
article, "Help for Homeowners?" in which Sen. Sherrod Brown, D-Ohio
was quoted as saying "We've heard one heartbreaking story after another of
borrowers with limited incomes being sold mortgages they could not afford."
It sounds as though these borrowers had no choice in the decision. My question
is if a person takes a mortgage loan he or she cannot afford, who is
responsible for the damages when it goes into default?
Don't get me wrong,
there are unscrupulous lenders out there; however, don't you think the
borrowers have a responsibility to be accountable for the mortgage decisions
they make? A home purchase, or home mortgage, is one of the biggest
financial obligations we have in life -- do your homework and think about the
ramifications of the home loan you are acquiring and the responsibility you have as a mortgage holder.
Most lenders will
turn down client's requests when the home loans do not make sense or are too
risky for borrowers. One hundred percent financing on a $750,000 new home purchase,
stated income/stated asset (because there is no income and are no assets),
combined with poor credit history does not make sense. And it is fraudulent if information
has been misstated to the lender or misrepresented to the borrower.
If your loan officer
changed your application, altered disclosures, or failed to provide them,
encouraged you to misstate your income, or changed the terms of your loan
without your permission, you need to come forward. Your state's Department
of Financial Institutions can take your complaint or help you file it in the
right place. HFA loans are administered by HUD and complaints should be filed
at the federal level. However, if you just realized today that the loan you
took out last year isn't the deal you thought it was, you are responsible for
what you sign -- and you're stuck.
You have a responsibility as a borrower to be informed. Educate
yourself, use a licensed loan officer, and always ask your lender for a Good
Faith Estimate and Truth in Lending Disclosure -- the two key documents in the home
loan process. Don't be a willing victim --taxpayers may not be willing to bail
out borrowers who make poor decisions.
About the Author
Sheryl Landrum is a Senior Loan Officer with First Capital Mortgage in San Diego and Prudential Realty in Bonsall, California.
