14.98% mortgage rate. WTF!

[justgamma]

Gotta' rant here. My daughters mortgage rate is 12% now. They got behind when she had surgery last year. I helped them catch up. If they are a day late it costs about $70.00 in late fees. They bought the house for $46,000.
Started out with $450 payments and 6.25 interest rate. Now it's up to $670 a month.

Here's the kicker. They've been calling her for a few months, claimed they wanted to help her lower her payments.
Well, they went up to talk to them today. and here's the friggin' "deal" they offered her.

Add the $600 she still owes on her car, give her a 23 year loan, at 14.98% interest. After a year with no late payments it would go down to 12.99% Her payments would increase to $811 a month. Some effin' deal, huh?

She started out with a 6.25% fixed interest rate. They claim that because they were sold the mortgage that it atomatically went to an adjustable rate.

I think this is crooked. They signed papers for the fixed rate. Is this how they are trapping some people with these awful adjustable rates? There ought to be a law.

[Lefta Dissenter]

1. Contact your State's

Department of Financial Institutions. If they're anything like the department here in Wisconsin, they'll be very interested and extremely helpful. Better than paying an attorney right off the bat.

[last1standing]

2. If she signed a fixed rate mortgage it remains fixed.

Did she refinance or take out a second mortgage? If she hasn't agreed to a change in terms then the original contract should be intact.

Contact a lawyer.

[sandnsea]

3. This is what I've been saying

This is what all these Wall Street finance companies planned all along. This is the mortgage security investment they were selling. Woohoo! Look at all the money we'll make when we reset these loans from 5% to 10% or 15%!! Historically, people will do anything to keep from losing their house, PLUS the bankruptcy bill made it next to impossible to stay in your house after you file.

This was a scam from the highest titans of finance in the world, all along.

Tell your daughter to contact the FHA people in her area. If she's been behind in her house payments, tell her to call the foreclosure prevention dept, NOT the people she has been dealing with. Under no circumstance should she pay anywhere near this amount of money on her mortgage.

Excuse me if it offends your sensibilities, but goddammotherfuckers. :grr:

[rurallib]

4. let me be the third to say contact a lawyer.

If they can't afford one, see if you can find a legal aid society or some other such group.

[kcass1954]

5. The loan terms cannot be modified simply because the loan is sold.

The purchaser of the note accepts the loan terms as is. Call an attorney right now.

[kirby]

6. Sounds illegal to me...

"She started out with a 6.25% fixed interest rate. They claim that because they were sold the mortgage that it atomatically went to an adjustable rate."

If that is true, the contract should state those facts and the contract is binding. However, I wonder if what she really signed was an ARM that was initially fixed and then converted to adjustable based on her credit rating. As others said, I would contact legal aid to help you examine the original contract.

[99th_Monkey]

12. If not an ARM, then perhaps a legalese-cloaked clause buried in the fine print ...

saying something to the effect ... see it? right there at the bottom of page 56 of the mortgage contract...

SECTION 26: "In the unlikely event that this Lender sells this mortgage to any other entity, then said 'other entity'
may review the terms of this contract to insure that it conforms to said entities standard lending practices, terms
and rates."

[justgamma]

7. Thanks everyone.

It just smells really fishy. They are'nt behind on their payments and haven't been for months now.
I'm going to start digging a little deeper and see what I can find out.

[TwilightZone]

8. The terms of a mortgage do not change when it's sold.

If it was a fixed rate and they have not refinanced or signed a new loan, the rate should remain fixed. Something is definitely fishy, or you're not getting the whole story.

Even if it was an adjustable rate, many adjustable rate mortgages have a cap, usually in the +5% range, meaning that the rate cannot go any higher than 5% above the initial rate.

Frankly, it sounds like the mortgage company is just trying to get them out of their existing loan and into one with which they can screw them over.

[thunder rising]

9. Hope for Homeowners ... FHA program. I'm doing it!!

My rate went to 10% without any wrong doing on my part. So, I'm going to take part in the Hope for Homeowners program.

1. Primary residence.
2. Purchased before this year
3. Have made 6 payments
4. The payment is greater than 31% of your gross monthly pay.

You get a "low interest" 30 year fixed rate.

There is some rumor about splitting any profit from the eventual sale, but a real reduction in the amount and rate of the load would be money ahead over the years.

[justgamma]

10. Thanks.

I'll suggest this to them.

[Demobrat]

11. This is illegal!

A loan is a contract. The terms of the contract do not change no matter how many times the loan is sold. Does she have a copy of her loan papers? She needs a hour long consult with a real estate lawyer, ASAP. It will be well worth the $150.

[phantom power]

13. Welcome back... to the 80s.

[Joanne98]

14. That's fucked up. It doesn't sound legal. If they can change the interest rate

everytime your loan is sold, we're all screwed. Send that info to these people ..

http://www.creditslips.org/creditslips/

They got a lot of experts writing for them.

[Warpy]

15. You need a lawyer

If it started at a fixed rate, it stays at a fixed rate, no matter who buys the paper.

Your daughter is being ripped off. Unfortunately, it's up to you to stop it.

In any case, she should NOT sign anything until she has a lawyer look it over, and probably not even then.

I think you have grounds to sue to get the overpayments back.

(Yes, lawyers cost, but in a case like this one, they can save you more than they cost)