[Lobowolf]

mike777, on Oct 1 2008, 04:50 PM, said:

Speaking of fiduciary duties or just plain duty.

"Yes, those buyers have a definite hand in it; however, it's a complex and technical field in which buyers, particularly first-time buyers have very little expertise, and are dealing with people for whom it's a full time gig. Similarly, prosecuting attorneys have duties that defense attorneys don't have, and eminent domain attorneys representing acquiring agencies have duties that eminent domain attorneys representing property owners don't have. I think there's a strong case to be made for heightened duties here, as well. In addition to the complexity and the vast differential in specialized knowledge, there's a strong public interest (as we've recently seen) when it comes to widespread failed mortgages"

Almost everyone has a lawyer at the closing. Did not the lawyer need to act with an obligation towards his client?
I ask this because the last two times I closed on a mortgage my loan documents which the lawyer had reviewed were wrong. Wrong rates...even wrong name on loan document,my name was not even on the document.

1) We got the buyer acting stupid.
2) We got the bank acting stupid.
3) we got the broker acting stupid
4) we got the buyers lawyer acting stupid.
4) We got the seller...saying please please sign and let me run fast before you default on that stupid loan and you pay me this stupid inflated price for my home....

Your attorneys' screw-ups emphasize the point; how much more likely is an unrepresented home buyer to drop the ball? There's one idea off the top of my (your) head...no sales to unrepresented buyers.

I think it's certainly stupid (or worse) for a broker to "guess at interest rates." From a legal standpoint, I think lack of income verification is certainly reckless. For adjustable rate mortgages, maybe a conspicuous print sheet showing what the payment will turn into if interest rates go up 0.5%, 1%, 2%, 3%, etc. in the next 1, 2, 5, 10 years...something like that.

[pclayton]

mike777, on Oct 1 2008, 01:39 PM, said:

If I understood Phil there were three mortgages on his home.

Mike, I doubt there is a court in the world that would allow me tort damages for being clueless about any real estate transaction when they ask me about me about my resume.

[mike777]

Lobowolf, on Oct 1 2008, 05:05 PM, said:

mike777, on Oct 1 2008, 04:50 PM, said:

Speaking of fiduciary duties or just plain duty.

"Yes, those buyers have a definite hand in it; however, it's a complex and technical field in which buyers, particularly first-time buyers have very little expertise, and are dealing with people for whom it's a full time gig. Similarly, prosecuting attorneys have duties that defense attorneys don't have, and eminent domain attorneys representing acquiring agencies have duties that eminent domain attorneys representing property owners don't have. I think there's a strong case to be made for heightened duties here, as well. In addition to the complexity and the vast differential in specialized knowledge, there's a strong public interest (as we've recently seen) when it comes to widespread failed mortgages"

Almost everyone has a lawyer at the closing. Did not the lawyer need to act with an obligation towards his client?
I ask this because the last two times I closed on a mortgage my loan documents which the lawyer had reviewed were wrong. Wrong rates...even wrong name on loan document,my name was not even on the document.

1) We got the buyer acting stupid.
2) We got the bank acting stupid.
3) we got the broker acting stupid
4) we got the buyers lawyer acting stupid.
4) We got the seller...saying please please sign and let me run fast before you default on that stupid loan and you pay me this stupid inflated price for my home....

Your attorneys' screw-ups emphasize the point; how much more likely is an unrepresented home buyer to drop the ball? There's one idea off the top of my (your) head...no sales to unrepresented buyers.

I think it's certainly stupid (or worse) for a broker to "guess at interest rates." From a legal standpoint, I think lack of income verification is certainly reckless. For adjustable rate mortgages, maybe a conspicuous print sheet showing what the payment will turn into if interest rates go up 0.5%, 1%, 2%, 3%, etc. in the next 1, 2, 5, 10 years...something like that.

1) I have never seen an adjustable mortgage but do they not have something like this? I mean how stupid is the buyer, buyer's lawyer, broker, bank if they do not have something like this?
2) Given this buyer I think the mortgage should also have something about what happens if they lose their job, get sick or injured and cannot work, spend all their money on Kenberg's legal slot machines and legal booze or go to Vegas and lose.
3) If not I sue!

[Lobowolf]

The law recognizes varying degrees of culpability with respect to people's states of mind. While such a buyer is almost certainly negligent (essentially, "should have known better"), the brokers in many cases were reckless (essentially, "did actually know better, and deliberately disregarded it"), which is a higher state of culpability.

[cherdano]

pclayton, on Oct 1 2008, 04:17 PM, said:

mike777, on Oct 1 2008, 01:39 PM, said:

If I understood Phil there were three mortgages on his home.

Mike, I doubt there is a court in the world that would allow me tort damages for being clueless about any real estate transaction when they ask me about me about my resume.

Well you could fake your resume, but then there would still be your BBF posts out in the open

[barmar]

mike777, on Oct 1 2008, 05:18 PM, said:

Listen to Feldstein yourself but what I meant to only say was mortgages on main home are nonrecourse loans. If you hand over the keys..........most often because you cannot make the payments....you walk away from the debt......the homeloan company cannot go after your other assets.

To be fair......even the phrase "make the payments" can be confusing. You may choose to make the car payment and insurance payment and hospital bill payment and not make the house payment...even though you have the option to make the house payment and not pay the hospital.


With a car if you cannotmake the payments, hand over the carkeys...you still owe the money...and the carloan company can go after your other assets.

Mortgages on a primary residence have a privileged status in the US. Beside the fact that they're non-recourse loans, you also get tax benefits. Home ownership has long been part of the "American Dream", and the government does what it can to promote it.

I was also thinking the same thing about "make the payments". Everything is a choice between paying for one thing or another. But I decided not to write it. Some things are necessities, like food and clothing. While a home is a necessity, owning a house is not. So it's obvious that certain choices will have to go a certain way.

[Mbodell]

helene_t, on Oct 1 2008, 01:33 AM, said:

mike777, on Oct 1 2008, 05:35 AM, said:

In the USA mortgage loans are nonrecourse. If you default you get to walk away from debt. Compare this to Car loans or credit cards which you can default on but still owe money when they take away your car.

Ok so I can walk away from my $300,000 house with a $400000 mortgage and then buy a similar house (maybe even the same house, lol) for $300,000, thereby screwing the bank for $100,000? Strange system.

Yes, people have been doing exactly this. The trick is you need to buy the house across the street or in the same development (that is the exact same floor plan) *before* you default on your original house.