Smashing Pumpkins

What other title would you expect from the day after Halloween?




How about this one?

Who's Making Money From Your Foreclosure...

Another interesting article.
This one from the Wall Street Journal.

How's this for wild...
Somebody you don't know, who has no relation to you or your mortgage could profit from your going into foreclosure (without them buying or selling your house).

Bryan Whalen and Ike Spirou have never met. But through the world of modern mortgage finance, their fates are inextricably linked.

Mr. Whalen, who manages a multibillion-dollar mortgage-bond portfolio at Los Angeles-based Metropolitan West Asset Management, stands to gain if Mr. Spirou, a financially stretched homeowner in New York City, reneges on his mortgage loan. That's because Mr. Spirou's $360,000 loan was packaged with thousands of others into a bond, and Mr. Whalen has entered a newfangled derivative contract -- similar to an insurance policy -- that will pay off if enough loans in the bond go bad.

"The sophistication is remarkable right now," says Mr. Whalen. "You can profit in any scenario."

So there are people out there that are betting on you going belly up.
And if you do, they make money!
What a strange and cruel world it is...

Is there anybody out there betting on your paying all your bills on time?
The truth is...

Not many.
You know the credit card people want you to be late.
They make huge amounts of money from over limit fees, late payment penalties, cash draw fees and so on.

The mortgage people are no different...
They love to ding you for late fees, not to mention prepayment fees.

It never ceases to amaze me. When I order a payoff from a lender I know what the last mortgage statement said for balance due - but this isn't what the lander says in their payoff demand statement. They tack on as many fees as they can.
Here's a sample from one I received last week.

Per Diem Interest: $1,314.47
Recording Fee: $54.00
Demand Statement Fee: $30.00
Prepayment Fee: $5,513.45
Fax Fee: $10.00

And remember, this was in addition to what showed on the statement!

I didn't want to say anything but they must have waived the
"We're not going to return your phone calls fee"

or the ever popular

"Since you ordered the payoff demand, and now we know our customer wants to leave us, we're going to drag our feet for as long as we can, meanwhile we are going to call, email and even knock on the door of this customer and promise them anything and everything we can just to get them to stay with us no matter how much we stretch the truth to do it" Fee

That's my personal favorite!
And don't for a minute think that they don't do it.
Some lenders will even start the process of "Customer Retention" when they see an inquiry on a credit report.

Putting that in real terms:
You come to me to apply for a loan to refi out of something you should never have been in the first place.
I pull your credit, and maybe even get an approval for a new and better loan.
The very next day you receive a call from your present lender.
They start out nice enough.
"We're just calling to make sure your happy Mr Smith. And remember, if there's ever anything we here at ABC Lending can do for you, we're here to help."

They know you are looking at refinancing. They know when someone like me pulls your credit. And the person who calls you has a simple job. He is to say or do anything he can to keep you in the fold. Like Tom Cruise in the firm, once your in, they don't want to let you out!

The problem is the retention guy, knows all the lies, he knows why you want out, he knows what you want to hear, he knows what works and what doesn't, he does this 50 times a day, 5 days a week.

His focus isn't on your goals, it isn't on finding the best loan for you, it's plain and simple - Keep you a customer.

In the end, they are going to try and get you any way they can.
Be Careful!