I'm not being mean but honestly this is why MSF gets no attention.
It's far too easy to turn a predatory lending story into a "they wanted more house than they could afford story" because to be honest it's true, the trap they are caught in, they walked into it themselves.
I'm so sick and tired of reading these stories while people who have actually been victimized by the servicers get pushed aside.
One Family's Journey
Into a Subprime Trap
Monteses May Lose
House as Rate Resets,
Credit Options Dry Up
By JAMES R. HAGERTY and KEN GEPFERT
August 16, 2007; Page A1
FULLERTON, Calif. -- Nearly two years ago, Mario and Leticia Montes found a home they loved, a gray stucco bungalow with a hot tub in the backyard in a middle-class neighborhood of Orange County.
The price was a major stretch at $567,000. But the couple, who had sold a home a few years earlier to move to a better area, was tired of renting. Mr. and Mrs. Montes convened a meeting with their two teenage daughters around the kitchen table to hash out the implications. "We agreed we wanted to be homeowners again," says Mr. Montes, "even if it meant the end of vacations and not eating out as often."
Like many people who jumped into the rising housing market in recent years, they had little money for a down payment and chose a loan that would hold their monthly payments down for the first two years, then "reset" to a much higher level. Mr. and Mrs. Montes say their mortgage broker assured them they would be able to refinance in a couple of years to keep their payments affordable.
With a December "reset" on their loan looming, however, the refinancing option now looks impossible. A friend who works as a loan officer called with some bad news this week: Similar homes in their area have been selling for $535,000 to $565,000 recently. That means the Monteses' loan balance may exceed the value of their home. (Reader's note: But they bought the house anyway. )
The Monteses are caught in a trap -- one that hundreds of thousands of people could face as the housing market totters and the easy credit of recent years dries up. They in effect bet that the boom in housing prices would continue. It was more important to hop onto the escalator than to wait until they could afford to make the leap according to traditional measures.
Write to James R. Hagerty at firstname.lastname@example.org and Ken Gepfert at Ken.Gepfert@wsj.com
Have you recently sold your home? Did current market conditions make it difficult to close the deal, or was it a nonissue? Share your stories: Send a email to email@example.com