Fannie, Freddie, and Banks...oh my!Follow

God your banks suck, because that's the first thing you should do up here as they're the ones most likely to work with you because they don't want you to default on it, so they'd rather work around it any way possible.

You're correct. They don't want you to default. But they do want to get as much cash out of you as possible. So. Let's say that ARM is about to adjust, or that balloon payment is about to come due. Do you think they're going to make sure to get that refinance in before that date? Or do you think they'll magically delay things as long as possible?

We're also dealing with business inertia here. The normal rule for a lender is that if they can foreclose, it's a good thing. They get the full value of the property *and* they get to keep all the cash you've been paying them. That's doubleplus good for them. While the business reality has changed, such that it's now far far more valuable for them to keep you paying on the 400k mortgage you have, then foreclose and end up with a 300k property that'll sit on the market for 6 months, most of the people working the desks at these lenders have worked their entire careers during a time when the opposite was true. Old habits die hard. They're still doing things to confound and delay attempts to refinance even when it's massively in the best interests of their company to do the exact opposite.


The average person working in a bank or lenders office doesn't have a clue how the market actually works. They have rules they were taught, and formulas (usually charts cause math is hard) that they apply based on numbers in a file. They don't know what they mean. They just follow them. And if they were trained to always delay and prevent people from refinancing as long as possible, they'll continue to do that purely because they didn't know why that was a good thing to do 10 years ago when they were hired, and have no clue why it's a bad thing to do now.

Lots of people here think that the first place to go is to their current lender for refinances and whatnot as well. Hence, the story in the OP. They're wrong, and I suspect you are wrong as well, but just don't realize it.

I'm going to go out on a limb and guess that Canadian banks operate by generating profits on the loans they give out? You know. Like all banks in the world do.

I'm also glad I'm in canada. My bank loan person spent a lot of time with me planning and figuring out if I could afford a loan. They offer payment holidays if I need them, and actually care about keeping me as a customer rather then exploiting me in the short term. That's just stupid. I'm glad my bank isn't run by idiots the way yours seem to be. Oh my banker also has real training and actually understands what he's doing.

I'm actually with a credit union not a bank at all, so I'm technically a shareholder. yay me.

Edited, Mar 19th 2009 10:43pm by Xsarus

Not only is that wrong, it's entirely impossible when they have A) Copies of my tax returns B) Copies of my pay stubs C) Copies of current utility bills D) Financial outline of all Debt-to-Income for the household. And I'm well aware of the concept of the banks ability to do modifications requiring a certain "delinquency". My complaint was that after jumping through all the hoops, they tossed it into foreclosure.

It may or may not be wrong. What absolutely isn't wrong is that you're presenting a ludicrous conceptual argument that your bank, rather than attempt to make money by keeping you in your loan, instead decided to intentionally lose a large amount of money by foreclosing on your home in a market where it's literally impossible they could ever recoup the capital outlay they made for your loan.

Now one of two things is occurring here:

You're lying and omitting key parts of the story because you're a worthless lazy assho[/i][/i]le, but pathetic enough to seek sympathy here because suckers in your life frequently offer this.

Or:

Actually, no there isn't another option.

Does anyone else snicker every time a reporter says the phrase "bad assets?"