In Boston, Residents Seek Face-to-Face Advice to Avoid Foreclosure

[ShockediSay]

Source: NYTimes

Carol Anderson has gone the entire winter without heat or hot water in her home here, because the payments on her adjustable rate mortgage have ballooned to $5,000 a month and she cannot afford paying a gas bill....

Desperate for help, Ms. Anderson attended a workshop on Saturday organized by Mayor Thomas M. Menino of Boston intended to help the city’s homeowners avoid foreclosure. Representatives from five mortgage companies met with clients to try to restructure loans. The workshop also offered classes on homeownership, credit ratings and other financial topics, in addition to providing residents with access to foreclosure prevention counselors....

Sophia Mitte of Mattapan said she spent seven months trying to modify her Wells Fargo loan, only to be notified by the company that her home was in foreclosure and a sale date was planned for April. Ms. Mitte said her son had to drop out of college and join the Marines because her family was no longer able to afford his tuition payments because of their mortgage. She also pays $300 a month for experimental cancer drugs.



Read more: http://www.nytimes.com/2008/03/30/us/30boston.html

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Yet another way the NeoCons have found to boost enlistments for Iraq

{to be fair, the forclosing bank indicated some willingess to help find some
way for Ms Mitte to keep her home ... read the entire article]

[McCamy Taylor]

1. B Ark people--realtors, lawyers--make $$$ everytime a property that can be resold quickly is

forclosed. Therefore if you live in a booming city where the real estate will sell fast, there is no incentive for the bank to work with you and every incentive for them to collect their 5k a month until you are bankrupt them foreclose on your house, let the lawyers collect their cut for doing nothing, the realtors collect their cut for putting it on the internet, the banks collect a new down payment from a new mortagage holder---and then the scam starts again.


And at any moment, a rich real estate investor can move in to snatch up all the property.

[notesdev]

8. No more booming cities

Outside of SF and NYC there are no more cities where any real estate will sell fast.

There just aren't any buyers. Anyone who was going to buy, who didn't already own, got in over the past few years.

Speculators are gone now, since there's no money left to be made in it.

In my very nice middle class area, the market price (the price at which people actually sold) for apartments identical to mine
went from $314k last May to $254k last month. And this area is supposed to be relatively insulated because of the large recession-proof job base.

God help you if you're in Florida or California, it's a bloodbath in those areas.

[L0oniX]

2. $5000 a month? What the hell did she buy ...a freaking castle?

I don't feel sorry for rich bastards that bite off more than they can chew.

[yewberry]

3. Check that attitude. Dorchester is one of Boston's poorest neighborhoods.

The woman had a balloon loan--those loans were heavily promoted a few years back and are really hurting people who didn't have a lot to pay up front. Also, Boston's home prices are quite high.

[high density]

4. In a poor neighborhood I'd say $5,000 a month should pay for the best place around

That's $60,000 a year she's paying for housing, more than most people in this country earn a year in gross income. It's not unlikely this woman was brought in by the low introductory rates of an ARM and then failed to look at what the payments would look like after the rate reset. Plus it says she's got two mortgages, so it sounds like she could've been one of those who used her house as a piggybank. The bank who gave her the loan is probably as guilty as she is, but that doesn't nullify her share of responsibility.

Then she has the gall to say, "I'm hoping they make it right." -- Umm, she was the one who bought the house. "They" don't have any responsibility to help her at all.

[yewberry]

9. I'm not making any suggestions about responsibility.

I'm saying that there's no reason at all to spout off "eat the rich" or some other such thing. We're not talking about some tony suburb somewhere--we're talking about a neighborhood dealing with crime, gangs, and urban neglect. We're talking about where poor people live.

[L0oniX]

5. $5k a month would have almost paid for my 2800sq home in one year. No one is forcing anyone to ...

live in an area for rich people.

[Sam Ervin jret]

6. In America there should be no such thing as "an area for rich people", the problem seems 2 fold

who the hell would get a $5000 mortgage(the buyers fault), and how did she qualify for one(the lenders fault)

To fix this mess, we could find blame all around or find reasons and solutions.

[shrike]

13. Dorchester is NOT a rich area. See above post.

Massachusetts as a whole has VERY high prices for real estate. A $400K home is nothing special.

[MADem]

7. It's not poor--it's regular folk. Firemen, policemen, that sort.

It's not a toney neighborhood, but there's good, hard working folk there.

[yewberry]

10. Yes, there are good hard-working people in Dorchester.

It's not a tony suburb, no. There are parts of it that are really blighted, though, and the number of boarded-up, foreclosed tripledeckers says a lot about the local economy. It's also not the safest neighborhood.

http://www.boston.com/news/local/2007_homicide_map/

[MADem]

12. Dorchester's not bad compared to East-a Bos. Now there's some blight, there.

Not too many homicides there, though, because there aren't as many "habitable" edifices!!! Also, there are more than a few drug dealers in Dorchester--I suspect a load of those homicides are either drug or gang-related.

One day, though, that property and the properties in East-A Bos are gonna be worth some MUNNNNNNNN-EEEEEEEEE. Talk about NO COMMUTE if you work in the city!

Unfortunately, you're seeing forclosures everywhere, even in the well-settled, homeowners-for-twenty-or-more-years sections of Revere.

[notesdev]

11. Probably an option-ARM

Which is supposed to be for serious investors who know exactly what they're doing, not people buying their first homes.

It's definitely an ARM - says that in the article - which was her first mistake. It could well be an option-ARM, or worse, an interest-only ARM. She bought more house than she could afford.

This is how they get you:

Your starter rate is, say, 2%. At 2% your payment is $1500/month, which is affordable for a middle-class family in the Boston area.

Then the rate resets a year later. Now you've got a 4% rate. Your payment is now $3000/month. To stay in that house, you've got to start sacrificing a lot of things.

Then the rate resets again. The rate is now 6%. Your payment is $4500/month. At this payment you're almost guaranteed to be forced into default unless you are very well off.

And just in case you can still afford that, there are more resets on the horizon.

It's a trap. The people who signed onto this were greedy, and the people who originated those loans are scam artists.