Predatory lending

ckboyd · Joined: 09 Sep 2008 Posts: 1 1.38 Dollars($)

I started with a an arm at 8.5 that was do to go up and a lot of credit card debt. My friendly neiborhood bank WF assured me the rate could only adjust up to about 14.5%. My credit was marginal so they insisted I refi the house and about 30k in credit card debt. Now the mortgage of the house is 160k and the value is 140k. The interest rate is 14.5. Is there any good way out of this besides walking.

adonis · Posted: Tue Sep 09, 2008 9:32 pm Post subject:

Welcome ckboyd,

I suppose it's never a good idea to simply walk away from your home leaving behind your debts and tarnishing your credit. The adjusted rate is likely to be 14% as you say. But that's quite a big one I suppose. You said you have a lot of credit card debts. But even if you refinance at a fixed rate, you won't get extra cash as the home value has dropped down and it's less than what you owe.

Had your home value been ok, I would have suggested a cash-out refinance to pay off your credit card debts. But that's not possible now. Also, I'm not sure as to how it would affect if you consolidate credit card debts with a debt consolidation program and then do a refinance to lower the rate on your mortgage.

Anyway, I suppose it's not predatory lending. What makes you think so?

0.10 Dollars($)

The value was always 140k on the home. At the time 1 owed 126k by forcing me put the credit card on the house in excess of the value by 20 k they have essentially made it impossible to refinance the property. My credit was around 730 or better. Old unused cards etc. No bad debts. etc. I use the term Predatory because of the tactics that were used.

helping_user · Posted: Fri Sep 12, 2008 1:27 am Post subject:

Welcome Guest.

I understand the bank has been unfair to you. After all, you didn't have bad debts and your credit score has been great. Maybe you are justified in using the term "predatory" because the bank has forced you to put the credit card debt on the house. From your post, what I've understood is that, you refinanced in order to pay off credit card debts and want to go for it again because your total debt has been piling up. Am I getting it right?

Thanks.

vegas_storms · Joined: 12 Sep 2008 Posts: 50 1.24 Dollars($)

Yes, if you have a new place you can rent and understand the 1-2 years it will take to repair your credit then by all means walk.

I assume if your house is worth 140k then you can rent a comparable for a $1000 a month or less. Take the difference ($900 a month) and put it away for the new house.

Do this only after all avenues to renegotiate with your lender have failed.

The people on here who say it's never a good idea to walk have alternative motives. There are many sound financial decisions where walking is the correct thing to do.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

ckboyd,

I suggest you call WF and demand that they do a loan modification for you so that you can repay this loan under reasonable terms. Let them know that the rate is just to high for you to handle and foreclosure will result. I wouldn't stop until you get someone over there that will do something for you. Ask for the loss mitigation department.

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