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High appraisal part of trouble, official says
By Betty Lin-Fisher
Beacon Journal business writer
Published on Saturday, Oct 04, 2008
Loans such as the one Addie Polk had from Countrywide Home Loans could be characterized as irresponsible and possibly predatory, though most predatory loans include adjustable rate mortgages, balloon payments and prepayment penalties, consumer advocates said Friday.
The 30-year loan Polk had was a fixed loan.
Summit County property records show that Polk, 90, originally paid off her home in 1982 and then re-mortgaged it three times since 1997. The first loan was for $21,000, the second for $46,400 and the most recent for $45,620 and a home-equity line loan for $11,380.
It is unknown why Polk needed the extra money.
The house sold at a sheriff's sale in June for $28,000.
Mary Schoenfeld, vice president and manager of American Eagle Mortgage Corp.
of Akron, suspects the lenders put Polk ''into something she couldn't afford and the appraiser was probably paid off to appraise the house for more than it was worth.''
''It's irresponsible lending,'' said Schoenfeld, who is also the chairwoman of the Summit County Office of Consumer Affairs board.
Polk's pattern of refinancing every few years is common for consumers who get caught in predatory lending traps.
Polk's loan from Countrywide and the $46,400 loan before that from America's Wholesale Lender were typical of dealings from national lenders from 2000 to 2007, before the Ohio legislature passed the Ohio Homebuyer Protection Act, said Cynthia Sich, director of the Summit County Office of Consumer Affairs. The exception, Sich said, were many of the locally based banks, which were not issuing the subprime loans.
''These loans were never in the best interest of the consumer. These were loans consumers could never afford,'' said Sich, who formed a Summit County Foreclosure Task Force in 2006 to gather together advocates, lenders and government officials to educate about the dangers of foreclosures.
But Sich said while there were irresponsible lenders, consumers do shoulder some responsibility.
''You can't say consumers are totally not to blame to some degree. You can't wave your hand and say you the consumers are free of all of the problems. It depends on what they're being told at the time of the sale,'' said Sich.
Often, consumers are rolling credit card debt, or what's known as unsecured debt, into their secured debt, or their house. That puts their house in danger, Sich said.
Consumers who get into that pattern often can't get out of the vicious cycle because the pattern remains — accumulating more debt.
Betty Lin-Fisher can be reached at
330-996-3724 or blinfisher@
thebeaconjournal.com.
Loans such as the one Addie Polk had from Countrywide Home Loans could be characterized as irresponsible and possibly predatory, though most predatory loans include adjustable rate mortgages, balloon payments and prepayment penalties, consumer advocates said Friday.
Get the full article here.
Comments
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chesapeake, VA
Posted 02:59 AM, 10/04/2008
countrywide is the worst thing that has ever happened. My loan through a local bank was sold to them even after I asked if the bank woukd sell to them. I have a fixed rate- means nothing to Countrywide.Yes I did read the contract!
Even now I get mail from them telling me to refinance. They seem to use people in a phone bank to sucker people back in.
Posted 05:00 AM, 10/04/2008
How much you wanna bet that family members were involved? Grandma, I need a car, Grandma, I need this or that, and Grandma helped them out. Since nobody can figure out why she took out the loans and no family members are screaming foul, I bet this elderly woman was screwed by preditory family, not preditory lenders.
Posted 05:04 AM, 10/04/2008
"Gaston"!!! The director of any bank that would approve a 30-YEAR LOAN FOR A 90-YEAR-OLD WOMAN should be thrown in jail! Nonetheless, does this now spark a trend of suicide attemps across the country of people in foreclosure?
The tax payers are in this position because the banks have never been regulated by the government. Having worked in a bank, I've seen people who in ONE DAY racked up $400 in overdraft fees. I never agreed with the $35 per transaction fine...maybe on per day...because the workforce to process that transaction is closer to $10.
Posted 06:17 AM, 10/04/2008
>"Thanks to Dennis Kucinich who mentioned this in DC today, I just read that her mortgage has been forgiven. I hope this lady makes it to enjoy the rest of her life in her home."
Yeah, except now the IRS will come after her for taxes on the forgiven debt. It is considered income. !!Someone tell her about the The Mortgage Forgiveness Debt Relief Act of 2007, PLEASE!!
Posted 09:31 AM, 10/04/2008
Connie,
It is ILLEGAL to discriminate because of age. If she wanted a 30 year, they have to give it to her. The bank had no choice in the matter.
Also, I have trouble believing that the appraisal was inflated. Keep in mind that the latest refinance was in 2004. All the property values were high. The appraiser can only compare it to similar houses that had recently sold.
Posted 09:39 AM, 10/04/2008
Imagine that! Taking advantage of a possibly befuddled elderly woman with equity in a home?
Now, how could something like that happen in our society today?
Akron, oh
Posted 10:11 AM, 10/04/2008
I have a countrywide home loan and receive mailings every 2 weeks or so asking me to call to get a great qouteon a refinance. Since the current interest rate is a half point over what I currently have, I simply throw out the mailer. No harm no foul. Countrywide is in the mortgage business to make money, if people refinance and end up paying more than that is your fault. Buyer beware.
Posted 03:39 PM, 10/04/2008
I feel sorry for this lady but glad she is getting well and will have a home to go back too.
My neighbor is being taken advantage of by an employee of the nursing home he was in for a few months but no one cares. He has no family that bother with him. We said something to the nursing home (as we were helping him) and they told her. He and her are now mad at us. He doesn't care about the money as he gets her attention when he gives her money. He filed bankruptcy after not being able to pay back many pay day loans and he turned his car in for the bankruptcy. Now she and her family moved in to help him spend more of his money. He thought he would be saving money as he was paying for her car and her cell phones (both in his name for her and her kids) and he was paying all her bills including her rent. He gets $4000 a month (pension and SS Disability) and they keep him hoping to do things for them and he is always broke. He used to have thousands in the bank. She made him get a will and he put his house, life insurance and everything he owns in her name. I wonder what will happen next?! Now that is what I call stupid.
Akron, OH
Posted 08:57 PM, 10/04/2008
"The house sold at a sheriff's sale in June for $28,000." What kind of human being would oversee the sheriff's sale of a house, and sign closing papers and checks, without looking at the occupant and where he/she would be able to go?? This is civil servant mentality at its best. And all the bleeding hearts want to give the government all our healthcare decisions to make!! Mind boggling . . .
south of Akron, NO
Posted 10:14 PM, 10/04/2008
Yup, copy cat crimes will appear. And this IS a crime - if you look it up, Suicide and attempted suicide is a CRIME. She should now be arrested for it...but then again, we the taxpayers would again come to her rescue and give her a place to stay and meals. Oh well...I'm guessing she is african american. Is she?
Akron, OH
Posted 12:11 AM, 10/05/2008
I wouldn't touch that Countrywide outfit with a ten foot pole.
