The truth in ‘predatory’ lending practices…
The fledging economy, fueled mostly by the housing market, has caused people to point fingers of fault. A good number of those fingers are pointed at mortgage lenders. But the question is… are our borrowing hands clean?
According to the results of a lawsuit in California, I was ‘victimized’ by my mortgage lender. But I’ll let you decide…
Unfortunately my husband was saddled with several thousand dollars of debt that wasn’t his. With the whopping 29.99% interest on the debt, my husband buckled under the payments and missed or underpaid often. On top of that, multiple cell phones were purchased in his name and not paid. While those who purchased the cell phones fought to take it off his credit, they were not successful. The cell phones went into collections and combined with poor payment history on the debt, a giant life altering 7 year stain was left on his credit.
After we got married, I ran his credit score and was shocked to discover he hovered in the high 400’s. We worked tenaciously for three years borrowing cautiously, paying timely, and keeping ratios low. It took us a year just to get within the credit limit and to get the monthly $75 over the limit fee to go away. As newlyweds, this was an incredibly difficult and dark time for us.
After the three years (in 2007), I ran his credit again hoping it had been resurrected. While we made an astounding nearly 200 point jump, his credit sat with its arms crossed at the mid-600’s and refused to budge until the collections and late payment history fell off… and according to the report, that wouldn’t happen until February of 2009.
I wanted a house, I wanted to build roots, and I didn’t want to wait another two years. We decided to move forward and buy a house, even though we still carried the debt… and the score that came with it. My credit score was high and we hoped this would carry us.
Hope.
We had a lot of it then. And we needed it.
To be continued tomorrow…..
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Posted: March 16th, 2009 under Credit Score, Debt Reduction, Life in General, home ownership.
Comments: 7
Comments
Comment from Monkey Mama
Time: March 16, 2009, 6:58 am
My feeling is the blame goes all the way around. I know a lot of people victimized. But a lot of them are not so innocent. I say the blame is 50/50. What I would really like to see is fraudsters on both sides punished by the legal system (people who lied on their applications and the mortgage brokers who falsified info). The fraud goes both ways.
Comment from Joan
Time: March 16, 2009, 7:34 am
Without hearing the rest of the story, I’m tempted to say that you made a questionable decision if you bought a house with someone with bad to not-so-great credit, when, if had you waited, you may have gotten a better deal on finance. This thing about your husband paying someone else’s “several thousand dollars” sounds mighty fishy, too. Can I guess that this was from co-signing for someone or from having to pay debt from a previous marriage? Sorry, but those would be his debt. And the cell phones? Same situation?
Comment from Snowy Heron
Time: March 16, 2009, 7:45 am
It is not just the borrower making a bad or poorly thought out decision. It is about the banks throwing away generations’ worth of good lending practices and deciding to lend to everyone. Let the good times roll! Well, good times always come to an end and a lot of the bankers who knew better retired or died and we had a bunch of cowboys out there making loans. Them and the ripoff artists in investment banker suits. What are they thinking, giving credit cards to teenagers who have no idea what they are doing? I guess they think mom and dad will take care of things for their kids. Everytime I hear some bad news about Citibank, I say hip hip hooray! They deserve every bad thing that happens to them. I hope they go out of business. And I say this as someone who works in the finance industry and who has perfect credit scores.
Comment from Michelle
Time: March 16, 2009, 12:05 pm
My Future Husband and I are lucky … well, I am … he has a great credit score, scoring a great mortgage rate and the house is in his name. (OK – maybe not so lucky for me if we break up.) Did you ever think about taking the loan out in your name on your credit alone?
Comment from Lizzie
Time: March 16, 2009, 9:06 pm
Wow, it’s amazing how people jump to conclusions. Let her finish the story people!
Comment from Nicole
Time: March 17, 2009, 6:46 pm
My brother gave me sage advice when I was younger. He told me when it came to buying a car, if you can’t pay it off in four years you can’t afford it. I took the same advice and went for a 30-year fixed loan with no tricks. I feel for those like you who were forced, because of no fault of their own, to purchase through “tricky” financing to get a home. For those who bought a home they knew full well they couldn’t afford, they need to take some responsibility for their bad judgement!
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