One Aspect of the Mortgage Crisis
Oct. 9th, 2008 10:25 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
deirdreI've heard a lot of people unsympathetic about the individual homeowners in the mortage crisis. Vera gives her side of the story about subprime mortgages, and it's worth reading.
In addition, I want to bring your attention to an ARM ploy that was used that is illegal and I believe there is a class action about it.
Essentially, this sort of ARM had a provision that they could adjust your rate based on your credit at the time, much as credit cards do.
Catch is, on a closed-end loan such as a car or mortgage (but not a HELOC, that's open-end), there's no permissible purpose to pull your credit unless you're late. There is case law on this point.
So say you missed a credit card payment but paid your mortgage on time, and then your ARM adjusted because that late is reported. That is illegal and should not happen, and some fraction of the people who were foreclosed upon had this happen to them and then had everything fall apart. So that is some part, however small, of the mortgage crisis.
If you're in this boat, or know someone in this boat, I recommend finding an attorney who is part of the National Association of Consumer Advocates, a group of attorneys who specialize in consumer law.
In addition, I want to bring your attention to an ARM ploy that was used that is illegal and I believe there is a class action about it.
Essentially, this sort of ARM had a provision that they could adjust your rate based on your credit at the time, much as credit cards do.
Catch is, on a closed-end loan such as a car or mortgage (but not a HELOC, that's open-end), there's no permissible purpose to pull your credit unless you're late. There is case law on this point.
So say you missed a credit card payment but paid your mortgage on time, and then your ARM adjusted because that late is reported. That is illegal and should not happen, and some fraction of the people who were foreclosed upon had this happen to them and then had everything fall apart. So that is some part, however small, of the mortgage crisis.
If you're in this boat, or know someone in this boat, I recommend finding an attorney who is part of the National Association of Consumer Advocates, a group of attorneys who specialize in consumer law.