Disabled Couple Faces Foreclosure

[The Straight Story]

Disabled Couple Faces Foreclosure

A foreclosure eviction hearing is headed to court this week. There are hundreds taking place up and down the state but what makes this one different are the clients who are being forced out of their home.

Jackie Mahone-Tyson and her partner Karen Mahone-Smith are blind. Corrective lenses allow Mahone-Smith to see enough to function. Mahone-Tyson lives with a total loss of vision. Both are on SSI, receiving monthly checks totaling less than $1,800. They qualified for a $265,000 loan through IndyMac, the nation's second largest home mortgage lender behind Countrywide.

The loan was initiated in the spring of 2006. By December 2006 the women were behind on their payments. In July of this year, they were in foreclosure.

"I just feel that we were absolutely given the wrong steer," Mahone-Tyson said, first from the loan broker who charged nearly $10,000 in broker's fees and commissions. Then IndyMac took another $2,000 in fees. The couple's monthly loan payment is just short of $1,600. That leaves them less than $200 a month to live on.

http://www.news10.net/display_story.aspx?storyid=35313

[danalytical]

1. Oh well

So why did they take out a 265K mortgage on $1800 per month? That's stupid and careless.

[DemBones DemBones]

7. Why didn't you read the article?

It's stupid and careless to criticize people when you have not read the article.

[danalytical]

35. I did read the article

And I understand that brokers and mortgage lenders are breaking rules and using illegal practices. That is a huge part of this whole housing problem. But on the other hand if people would stop reaching for the top branch and pick fruit much closer to them they wouldn't fall off the ladder as much. This is happening everywhere, people were purchasing homes they knew they had no business purchasing but they allowed their greed and emotion to overcome their logical thought. Whether or not they really could have qualified for that loan, they knew they only $1800 per month, so how did they justify to themselves (regardless of what the broker said) that they could afford a 265K home?

[Kajsa]

26. If you had read the article, you would have seen this,

"The SSI Web site clearly confirms the most anyone on SSI in California can receive is $921 per month."

the lender ( Indy-Mac) knew this and sucked them into a bad loan.

It's very easy to prey on the elderly and disabled.

[kurth]

2. And the mortgage brokers already got their billions

They're the one group of individuals who profited the most from this fiasco.

[tammywammy]

3. Why did they accept a loan for that much per month

knowing how much they get on SSI. I mean, yeah it's wrong that the mortgage company offered it to them, but they didn't have to accept it.

[Marrah_G]

4. Was there some sort of mental disabilty?

I am scratching my head trying to figure out how they thought 1800 a month would allow then to buy a home. Were they lied to about the price? Did the broker lie about their income? This makes no sense.

[mcscajun]

8. Sounds to me like a case of "sign here" and lies told.

One blind person and one almost totally blind, could easily be misled by a loan officer intent on fraud and self-enrichment.

:grr:

[Marrah_G]

16. I hope the mortgage broker and the mtg company are thoroughly investigated.

I don't know what mtg companies were thinking when they stopped income verification.

[whistle]

5. How were these people able to state $3,750 a month income when the only

...documentation they could produce for income was the SSI monthly check for $1,800 per month. This sounds like a case of fraud by the mortgage broker and negligence by the review people. A Chapter 13 filing could bring this mortgage payment in line with the couple's real income and force the mortgage holder to accept lower a payment so the couple would not be evicted from their home. This example is being repeated across the country with tens of thousands of home owners

[DemBones DemBones]

10. They didn't; IndyMac made up that figure.

See my post below.

[alarimer]

63. Apparently that's common

I saw an episode of NOW detailing that very practice. Where they just put down the amount of income that will qualify them for the loan, even if it is a lie.

[Didereaux]

23. If the couple signed with the fraudulent income, they were equally quilty! period

[Kajsa]

30. They didn't sign.

"However, the escrow company for the loan did forward loan applications that were unsigned."

You would have known that if you had read the article.

[Didereaux]

37. they signed SOMETHING!...

They are living in the house. They SIGNED something. They accepted terms. And as someone else pointed out, unless their handicap is mental they are involved in FRAUD...stupidity is not, nor has it ever been, a defense in a court of law.

[Kajsa]

42. It wasn't the loan documents.

What else would bind them to the loan?

btw, they both legally blind.
Who is the hell read the documents to them?

Stupidity? Try reading the article.
The lender was not acting in good faith.

[Didereaux]

51. I did read it and they were STUPID! and...

Let me put it to you this way, you're are in fact arguing that if a grifter sells someone the Brooklyn Bridge then the buyer does in fact now have a claim on the bridge! What you are COMPLETELY overlooking is that the mortgage broker(owner financing excepted) does NOT own the house it finances until such time as the loan defaults. The developer owns the house until it is bought and paid for(mortgagor). Look, yes they are blind, but unless they were declared mentally incompetent at the time of the sale, they share culpability...they cannot simply enter into a fraudulent scheme, claim stupidity and retain the house! Now if they were to sue the Mortgage company for damages and pain and suffering etc and collect enough money after atty fees then they could pay off the mortgage and would have their house.

Kneejerk, ill informed emotional diatribes do not help anyone, and in fact such touchy-feely shit as this aided in no small part to the arguments to tighten the bankruptcy laws and consumer laws in favor of the damned banks and such. The general level of ignorance of the public is its own worst enemy.

My advice is sit down the next time you run across one of these items, put it on a list...when the list gets to say ten or so then research the WHOLE facts of each one. At that time choose the one most likely to be won and focus on that issue. You'll add years to your life, what with the decrease in overall stress from NOT arguing lost or false causes.

...

[Kajsa]

61. From this post

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=2324346&mesg_id=2326088


I see where you are coming from, and it's damn ugly.

eom

[Richard Steele]

52. You're grasping at straws. You don't think there's any chance they were LIED TO?

No, they must be fraud artists- that's the only possibility you want to see.

[Didereaux]

67. no, no no! They are entitled to there money back, but NOT the house!

Notice in my previous post that I actually explained one remedy whereby they could salvage the thing. Bring suit for damages against the lender, and get a restraining order against eviction. FOLLOW THE LAW! Sometimes it actually works in your favor.(not often, but sometimes)

[Richard Steele]

69. And THEN they should be placed in the circus side-show, as per your previous post?

[Didereaux]

72. If the pay is good...why not! lol

[Wcross]

6. Sounds like their "loan officer" committed fraud.

The higher the loan amount the higher commission the "loan officer" receives. There is no way IndyMac would have approved them for a 265k loan based on an income of 1800 a month.

[rucky]

17. Without a doubt. n/t

[Didereaux]

40. ...and the buyers committed stupidity! n/t

[DemBones DemBones]

9. For those who haven't clicked the link to read the article:

IndyMac claims the women filled out a stated income application to qualify for the loan. On that application the lender says the women claimed they made a total income of $3,750 per month. It also stated Mahone-Tyson was the manager of a daycare in Bakersfield.

Mahone-Tyson says she hasn't even set foot in Bakersfield. Both women concede they talked to a loan broker over the phone to complete the application and told the broker they were on SSI.

IndyMac admits it knew the women were on SSI as well but says it deemed the $3,750 per month stated as "reasonable according to information readily available to the public." The SSI Web site clearly confirms the most anyone on SSI in California can receive is $921 per month.

(That means two people on SSI earn $1842 a month, nothing near the 3,750 IndyMac came up with.)

IndyMac also claims if Mahone-Tyson and Mahone-Smith signed their loan application stating a higher income, they committed fraud. After multiple requests, Indymac has yet to forward the signed loan applications to the women. However, the escrow company for the loan did forward loan applications that were unsigned.
"There are lenders who are knowingly putting people into loan products that they should not be in," said Pam Canada of NeighborWorks, an agency which counsels first-time home buyers and people going through refinancing.

You should click the link to see the photo of their home that they got a $265, 000 loan for. I know prices are higher in California but I can't believe that home is worth $265,000 even in CA.

[Tempest]

11. Why read the article?

It's so much easier to stay ignorant and blame the buyers.

:mad:


After multiple requests, Indymac has yet to forward the signed loan applications to the women. However, the escrow company for the loan did forward loan applications that were unsigned.

[SidDithers]

12. I'm outraged at the behaviour of the loan company...

but the consumer must also bear responsibility. It's not hard to get information about how much loan you can afford for a certain income.

Sid

[Tempest]

22. It appears they got the information from the lender

And the lender lied.

But it's easier to blame the buyer.

[SidDithers]

24. Someone selling something lied? Shocked. Shocked I am...

That still doesn't absolve the consumer of the responsibility of verifying what they're being told.

Sid

[lovuian]

14. This is just one example of FRAUD and these women were

the prey and it sounds like all over this stuff has happened

these people need to be locked up

THIEVES

[danalytical]

15. I do blame the buyers

It hardly matters how much the broker approved these people for. The couple KNEW how much the house cost right? OK, now that that's out of the way. They also KNEW how much money they actually collect on SSI, right?

Now do the math on a 30 year loan.

Do one with 3% interest.

Your monthly payment for 30 years
for an interest rate of 3.000 %
on a loan amount of $ 265000.00 is:

$ 1117.25 a month

Now do one with 7% interest.

Your monthly payment for 30 years
for an interest rate of 7.000 %
on a loan amount of $ 265000.00 is:

$ 1763.05 a month

Either way they couldn't really afford that house. They are living beyond their means and never should have taken that gamble. I don't care if they were in a hybrid loan or an interest only ARM they should know better.

[Kajsa]

27. Amen!

Placing all the blame on two elderly disabled women.

:puke:

[danalytical]

33. Yeah I do blame them

Don't purchase things you can't afford. I like older disabled women as much as the next guy, but that doesn't change the fact that they made the decision to purchase a 265K house with an $1800 per month budget. Why do people always shift the focus of an argument from the facts to emotions. It could have been a bus full of nuns that were in this situation and it wouldn't have made a bit of a difference. WHO they are isn't the point, the DECISIONS they made is the point.

They CHOSE to purchase a 265K house KNOWING FULL WELL they only have $1800 per month in their budget. The mortgage broker then chose to give them what they wanted and he didn't give a rats ass how it would hold up in the long run. I'm willing to bet that a substantial amount of ALL the home loans originated in the last 5 years were done in much the same fashion. It was big greed orgy featuring bankers, realtors, brokers, sellers, and of course BUYERS as well.

If people lived within their means, this whole bubble wouldn't even exist.

[Richard Steele]

36. That's an amazing mind-reading ability you've got there.

The rest of us have no way of knowing what they knew,
or what they were thinking.

You, on the other hand, seem able to read their minds at a distance
like some psychic Bill Frist.

That's quite an impressive feat.

[danalytical]

38. Look Dick

If they only had $1800 a month, and the house was selling for 265K.....

That's ALL ANYBODY needs to know. Got that? If you think somebody needs to be a psychic to figure out that they made a bad decision with only those two facts, that's your problem.

[Richard Steele]

48. You're entirely determined to blame the victims of this obvious fraud, no matter the facts.

That's all -I- need to know. Got that?

[danalytical]

54. You're wrong, there probably was fraud

I hope they all go to jail, but none of it changes the two simple facts that we know. The couple voluntarily sought out a loan for a house costing 12 times their annual income. That's totally ridiculous.

[Kajsa]

43. Who knows what the lender told them.

They are both legally blind, remember?

"Jackie Mahone-Tyson and her partner Karen Mahone-Smith are blind."

it's in the article.

[danalytical]

45. So what

Are you telling me being blind prevented them from knowing that the house cost $265,000? Or that they didn't know they had an $1800 per month budget?

[Kajsa]

46. What did the lender tell them?

Do you know for sure?

I didn't think so.

Get a heart.

[danalytical]

49. It doesn't matter

Why does it even matter? There are two facts that we know..

A) The annual household income is $21,600.


B) The couple bid and purchased a $265,000 house.

If the couple gave every single penny to the bank it would have taken them 12.2 years. That's without even addressing interest rates, property taxes, house upkeep, and insurance.

Who on earth goes out and buys ANYTHING that's 12 times their annual income?

[Kajsa]

53. Someone who was hoodwinked by

a predatory lender, promising them a sub-prime loan
or worse.

Apparently you don't understand how easy it is to take advantage
of some people who are elderly, nor do you understand their
frame of mind.

I do.

[danalytical]

56. It's not just the elderly

It's pretty much every person out there that bought a home that cost more than 3 or 4 years of their total income. I blame all of those people for not being responsible in making the biggest financial decision of their life. I also blame the republican party for removing lending regulations that allowed banks to give these people loans they knew they couldn't afford.

Here is a list of all the responsible parties.

Greedy:
-Sellers
-Buyers
-Brokers
-Bankers
-Appraisers
-Politicians

Here is who was hurt the most by all of this crap.

Responsible:
-Sellers
-Buyers
-Brokers
-Bankers
-Appraisers
-Politicians

[OzarkDem]

41. There used to be laws to protect consumers

Federal law used to require lenders to disclose this stuff w/ buyers in detail before they signed.

There also used to be laws requiring homeowners purchase mortgage insurance if their mortgage payment exceeded a certain percentage of their income.

What happened to these laws?

[baldguy]

13. Offering loans like the & misleading people to intice them should be a crime.

But corporations have more rights & are more important than individuals.

[taught_me_patience]

18. I gotta blame the buyers on this one

at what point do people start taking responsibility for their own decisions. :shrug:

[Kajsa]

29. It sounds like they were lied to

by the loan officer(s).

People on SSI know exactly how much they can
and can't afford to spend per month.

Two elderly ,disabled ladies were hoodwinked by
unscrupulous loan sharks.

[Terran]

19. They never signed the loan agreement; therefore...

it's a case of fraud. We don't know what they were told by the mortgage broker, but if they didn't sign, they didn't even have a valid contract of any kind. And believe me, it's easy to say they should have known something was amiss, but people can be remarkably ignorant of financial matters. They probably just accepted everything they were told and relied on the honesty of the broker. I used to work as a securities fraud investigator, and the things people will believe sometimes is amazing, even after they've already been ripped off.

[danalytical]

20. But just look at the simple math

265K house on $1800 per month? That's just plain stupid. I don't care how blind you are, you're brain still works and it must be telling you either, I can't afford this or I don't care if I can't afford this I want it anyway.

[CitizenLeft]

28. let's hope that no one you care about ever... EVER...

...NEVER does anything "stupid." Because I'd hate to hear the smug "I TOLD YOU SO!" you'd say to them.

May your vindication in your superior intellect forever shield you from human suffering.

[Terran]

32. We don't know what kind of BS they were handed

Two disabled women, older, perhaps easily taken advantage of and not well able to even read the legal documents for themselves? Maybe they were even lied to about what their monthly payment would be. All I can do is repeat what I said above: there are a lot of naive and easily fooled people out there who are constantly being taken advantage of by fraudsters, and that's what happened here. Unless you can imagine yourself in that situation, you're probably not going to have any understanding of it (and therefore no sympathy).

[dysfunctional press]

47. what did the broker tell them their payments would be?

if they were told they could afford it, and given a false lowball payment number- how would they know otherwise?

[danalytical]

50. By doing a simple calculation

265,000 divided by 21,600. That's 12 years of their total income. You have to be totally brain dead to even think about looking at purchasing something that expensive relative to your income. And don't tell me it's different with a house because it's not. Would you buy a car 12 times your annual salary?

[dysfunctional press]

66. if you're purchasing it over a 30-year period, and you're told that you can afford it...

then you're going to think that you can. you have to remember the level of intellect that most americans DON'T have regarding financial transactions. especially ones that involve large numbers and interest calculations over a period of many years.

these women are not sophisticated investors, and probably very trusting people- EXACTLY what the lender was looking for.

[tammywammy]

21. It says they didn't sign the loan application

Not that they didn't sign for the loan itself.

At some point they had to have been told what their monthly payment was going to be.

[bdamomma]

25. terrible this corrupt and insane administration won't be happy

until they screw everyone, my only hope that all this misery that they are inflicting on the American people and others around the world will come back to BITE them HARD.

[Kajsa]

31. WTH?

a number of posts here show the poster

-didn't bother to read the article

-proceeded to bash two elderly, disabled women
and
-try to sound like they knew what they were talking about.

Hmmm---sounds and looks very fishy.

[earth mom]

34. I doubt it's their fault. Lenders have scammed the public. Story on PBS's NOW:

Watch Mortgage Mess on NOW:

http://www.pbs.org/now/shows/346/video.html

[Name removed]

39. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Kajsa]

44. The last part of that sentence is disgusting.

Ridiculing disabled people has no place on DU.

[Richard Steele]

57. Really showing your true colors today, eh? Nice sigline.

[Kajsa]

60. ----

Thanks.;-)

:pals:

[LostinVA]

68. How DARE you talk about disabled and SpecEd folks this way!

I shouldn't be shocked, because I know your posting history, but this made me gasp aloud.

I can't wait to see the tripe you write to justify this.

[KamaAina]

55. There are supposed to be legitimate low-income home ownership programs through HUD

but it's left up to the local housing authorities to deicde whether and how aggressively to implement them; most serve only a few families or none at all.

http://www.stevegoldada.com/stevegoldada/archive.php?mode=A&id=215

Even though Congress and HUD have authorized and encouraged Housing
Authorities throughout the country to work with and assist low income persons in
purchasing their homes, less than 800 Housing Authorities out of nearly 3,000 have
used this program, and less than 10,000 eligible low-income families and
individuals have purchased their own homes.

When we inquired into why so few Housing Authorities are participating in the
home ownership program, we were told, for example, that the federal
regulations are "too cumbersome"and the down payments are difficult to put together.

Nevertheless and even with these "barriers," of the 10,000 low-income
families and individuals, nearly 7,000 have purchased their homes with Section 8 /
Housing Choice Vouchers. (The remaining 3,000 are under either the Moving to
Work or Family Self-Sufficiency programs).

And thanks to this, people like this couple become easy prey for the low-life scam artists. :grr:

edit: link

[danalytical]

58. I tried

I tried to purchase a home through the surplus property program in CT for section 8 HUD low income families.

I was one of at least 30 people who submitted paperwork. I didn't get it. Imagine 10 houses available for 100,000 low income people seeking a home. Totally inadequate.

[Kajsa]

59. Thank you, KamaAina!

It's just so easy to blame the ladies.
:grr:

I am so glad to see you here!

:pals:

[Hekate]

62. So much fraud went on; they are not the only victims. Limited-English speakers were also taken in...

Fraudulent loan officers/lenders just made things up to push the papers through during the heyday of easy loans. There was SO MUCH money to be made.

Hekate

:argh:

[Kajsa]

73. That's so true, Hekate.

And like the ladies here, there is no honest person
to help them.

It's total predatory lending, just like the credit cards
to college students with limited incomes.

:(

[Mountainman]

64. There is a lot missing here. When a house is sold there is an escrow period.

Usually around 30 days. Part of the process is proving the buyer's income is sufficient to repay the loan.

At the closing you are told what the payments and taxes are and usually they add credit insurance on top of that.

I don't believe this story.

[Richard Steele]

70. It's clear that a lot of things that were SUPPOSED to happen, didn't happen.

This entire deal went through based on fraudulent documents-
a loan application THEY NEVER SIGNED.

Just how many people have to be NOT DOING what they should be,
in order for that to happen?

[tammywammy]

75. Exactly

At some point someone had to show them what the payment was going to be. At that point, no matter all the other crap that went on, they didn't have to sign for it. They could have backed out then.

[lonestarnot]

65. Terrible terrible!

I hope they are barred from taking thier home. Sons a bastards!

[SoCalDem]

71. "...There are no other alternatives for them to save their home..."

some facts:

It was never "their home".. they only rented it for a short time.

They probably put little or nothing down, and they only got IN the house in the "spring of 2006", so basically they overspent on "rent" for the few months they paid it...

Being totally on SSI, pretty much means their credit is virtually nil, or they would not have had to use a predatory lender to start with.

They were "behind" within a few months, so other than the additional "stain" on their credit reports ( which probably already were pretty full of marks because of their extrememly low income for where they live), and the hassle of moving, they probably did not "lose" all that much...and being handicapped, they will surely fins sympathetic people in the community who will comeforward NOW, and find them a place they can afford to rent.

The real tragedy of foreclosure is when an old person with a nearly paid off loan (or nearly paid off) gets conned into "re-fi" loans or second mortgages to access equity, and ends up losing the house because they don;t have income enough to pay the sketchy loans..

Mortgage-brokers are a fairly recent thing. there was a time when BANKS issued mortgages, and they had very strict rules about qualifying.

Buying a house over the phone, is a very risky thing to do, and unfortunately these women got caught up in the scam..

[Hekate]

74. Predatory lending with intent to defraud. And a ton of judgmentalism from DUers re the victims.

Just an addition to this conversation -- not aimed at Straight Story, who I know knows better.

If children test positive for lead poisoning, do you blame their parents for trusting the brand-names Mattel and Fisher-Price all these years?

When old people like my late mother were gulled into long-term investments by the sharply dressed men with a desk at the bank, did you blame the old people for believing that anyone with a desk inside the bank was in fact a bank employee providing federally-regulated services?

When someone with a pile of medical bills not covered by their insurance has to declare bankruptcy, do you blame them for thoughtlessly getting cancer?

Regulations exist to protect consumers, but after 20+ years of de-regulation by the Publicans we are all pretty vulnerable.

Is the source of all this blame-and-shame a secret hope that this disaster will never happen to YOU? Why would you even think that?

Hekate

[aikoaiko]

76. once the foreclosure is complete, are the couple financially liable for anything?

If not, foreclosure might be the best financial outcome for them.